HDFC Life Insurance Company Ltd IPO Details and Review

November 6, 2017

  1. About HDFC Standard Life Insurance Company Ltd
  2. Key Strengths of HDFC Standard Life Insurance Company Ltd
  3. Promoters of HDFC Standard Life Insurance Company Ltd
  4. Financial Performance of HDFC Standard Life Insurance Company Ltd
  5. HDFC Standard Life Insurance Company Ltd IPO Details
  6. Objective of IPO
  7. Risks for investors in HDFC Standard Life Insurance Company Ltd (HDFC Life)

About HDFC Standard Life Insurance Company Ltd

HDFC standard Life Insurance Company was established in the year 2000 with its headquarters in Mumbai, India. The company is a joint venture between formed between Housing Development Finance Corporation Ltd (HDFC) and Standard Life Aberdeen PLC which is a United Kingdom based financial savings and investments service provider. Post August, 2015 HDFC holds 61.65% stake in HDFC Life whereas Standard Life holds the stake of 35.00% in HDFC Life with rest to be held by others.

hdfc-life

In India, HDFC Life hosts 398 branches with its presence in over 980 cities. The company also has an established liaison office in Dubai.

HDFC Life is an insurance provider company with its products in protection, pension, savings, investment and health along with children and women plans. Under the product section, company has 29 retail, 8 group products with 7 optional rider benefits as on May, 2016.

Following are the list of products of HDFC Life –

• MohitKarnwal Protection Plan
• Click2Protect plus
• CSC Suraksha
• Click2Invest in ULIP Investment plan
• Health Plan
• Savings and Investment Plans
• Retirement Plans
• Women’s Plan
• Children’s Plan
• Rural & Social Plans
• Click2Retire

HDFC Life uses Direct channel, multi-channel network, insurance agents, insurance brokers bancassurance partners (HDFC Bank, Saraswat Bank, RBL Bank),online insurance platform for distribution of its products. Following are the awards received by HDFC Life –

• In 2017, a survey conducted by The Economic Times and Great Place to Work Institute recognized HDFC Life as one of the India’s best companies to Work for in 2017
• In 2015-2016, HDFC Life received the ICAI Awards – Gold Shield Excellence in Financial Reporting for Annual Report in FY2015-2016.
• In 2016, Fintelekt awarded HDFC Life wife Indian Insurance Awards for Best Product Innovation (Life Insurance).
• In 2016, HDFC Life also got SAP ACE Awards technology adoption in Banking, Financial Services and Insurance (BFSI).
• In 2014, HDFC Life got PCQuest Best IT Implementation Award.

Key Strengths of HDFC Life Insurance Company Ltd

• HDFC Life is one of the top 5 largest life insurance companies in India.
• HDFC Life has a strong and trusted brand image that appeals to its customers.
• HDFC Life has showcased strong financial performance with consistent profitable growth.
• HDFC Life has a multi-channel distribution network with greater penetration of its products in various segments of Indian Market.
• HDFC Life has a strong IT Infrastructure for providing greater experience and smooth processing on digitalized platform.
• To ensure profitability and cost leadership, HDFC Life strategies to build economies of scale.

Promoters of HDFC Standard Life Insurance Company Ltd

The promoters of HDFC Standard Life Insurance Company Ltd (HDFC Life) are following –
1. Housing Development Finance Corporation Limited (“HDFC”);
2. Standard Life (Mauritius Holdings) 2006 Limited (“Standard Life Mauritius”); and
3. Standard Life Aberdeen plc (“Standard Life Aberdeen”).

Financial Performance of HDFC Life Insurance Company

The following table gives a summary of key financial highlights of HDFC Standard Life Insurance Company over the period of 2015 – 2017

hdfc-insurance-financial

The above table illustrates that the Total Revenue has significantly increased over the time period 2015 to 2017. It is also observed that and Profit after tax has a good increase over the time period 2015 to 2017.
In last 5 years, HDFC Life has showcase a good revenue growth of 22% CAGR, profitability growth at 19% CAGR with 3.8% margins in FY2017.

HDFC Standard Life Insurance Company Ltd IPO Details

Objective of IPO –HDFC Standard Life Insurance Company also known as HDFC Life targets to drive the advantages of listing itself on Equity Shares on the stock exchange. The company also targets to do the sale of offered shares by the selling shareholders through IPO process.

Issue Open Dates7th November, 2017 (Tuesday) – 9th November, 2017 (Thursday)
Face ValueRs 10 per Equity Share
Issue PriceRs 275 – Rs 290 per Equity share
Market Lot Size50 Shares
Listing atNSE and BSE
1 Lot Investment RangeRs. 13,750 – Rs. 14,500
Type of the IssueBook Built Issue IPO
Size of Issue299,827,818 Equity Shares of Rs 10 aggregating up to Rs 8,695.01 Cr
• Offer for Sale of 299,827,818 Equity Shares of Rs 10
Key Business Segments for RevenueInsurance services that include protection, pension, savings, investment, health and customized plans for child and women.
Promoter of HDFC LIFE Ltd.Housing Development Finance Corporation Limited ("HDFC"); Standard Life (Mauritius Holdings) 2006 Limited ("Standard Life Mauritius"); and Standard Life Aberdeen plc ("Standard Life Aberdeen")
Finalization of Basis of Allotment (Tentative)14th November, 2017
Initiation of Refunds (Tentative)15th November, 2017
Credit of Shares to DEMAT Account (Tentative)16th November, 2017
Commencement of Trading (Tentative)17th November, 2017

Risks for investors in HDFC Standard Life Insurance Company Ltd (HDFC Life) IPO

Following are some the risks stated by the brokerage houses –
• HDFC Life has dependencies on bancassurance partners, agents and 3rd party distributors. Any negative events may adversely impact the business operation of HDFC Life.
• Any change in regulation or compliance by government might certainly impact the business of HDFC Life.

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