Here are all the Brokerage Reviews and Recommendations of the IPO /Offer for Sale of
ICICI Prudential Life Insurance LtdDestimoney Securities Ltd said,
Recently HDFC life and Max Life entered into a merger deal. The deal was valued at Rs.665 bn for a combined embedded value of Rs.158.5bn i.e. 4.2 times embedded value. When compared to this transaction, ICICI Pru is offering its shares between 3.08 -3.43 times its FY16 embedded value. Given the strong bancassurance network of parent bank, we believe the company is poised to capture the meaningful pie of largely under penetrated insurance market in India. We recommend investors to SUBSCRIBE to the IPO at “CUT-OFF”.
Centrum Wealth Research Analysts Payal V. Pandya and Siddhartha Khemka said
At the higher price band of Rs 334, the issue is valued at 3.4x its embedded value of Rs 97.1 per share on FY16 basis. The valuations for IPru appear attractive when compared to 4.1x of Max Financial Services’ embedded value. Considering the healthy financials, return ratios of +30% RoE and one of the highest solvency ratio of 320%, we believe the company will be able to attract adequate investor interest. Also, the company’s operational strategies and focus on digital sales are expected to aid business growth going ahead. Hence, investors can subscribe to the issue.
Sharekhan in its review said,
IPLIC's Indian embedded value at March 31, 2016 was Rs139.39 billion. As per the same, the company is valued at 3.09x & 3.44x respectively on the lower and upper bands of the price band.
Angel Broking Analyst Siddarth Purohit said,
At the price of band of `300-334 the issue is offered at 3.1x and 3.4x its reported FY16 EV. While the company has enough scope for business growth in the future, we believe the issue is fully priced in and hence we have a NEUTRAL rating on the issue.
Daljeet Kohli of IndiaNivesh said,
Further recent deals in Life Insurance sector is indicatives of valuation of 2.2-3.8x of Embedded Value and recent one being at 3.8x EV (as per media articles) of Star Union Dia-ichi Life. We remain positive on Indian Life Insurance sector over longer term and since ICICI Pru Life being the market leader, it remains the key beneficiary. Hence we recommend SUBSCRIBE to this issue for long term.
Anand Rathi Analyst Ridhi Mehta Said,
Along with the growth prospects of the life insurance industry in India, ICICI Pru's strong brand, leadership among the private life insurance players, and cost efficiency make the issue attractive even though it demands premium valuation. The IPO values the company at Rs 47,939 crore, at the upper end of the price band. This implies a price to embedded value (EV) of 3.4 times the FY16 EV of Rs 13,939 crore. Thus, we recommend “Subscribe” to the IPO
Quantum Securities Analyst said,
The issue is priced at 3.1x-3.4x its FY16 embedded value of Rs 139.4bn, which is fairly valued considering the recent deals since August 2015, which were done in a valuation range of 2.1x EV (HDFC Life – Standard Life in August 2015) and 3x EV (Reliance Life – Nippon Life in December 2015) and the Chinese peers trading at 1.1- 1.7x EV. Considering the IPO being fairly valued, we have a ‘Neutral’ view on the public issue. We will re-visit our recommendation after reviewing the future growth prospects of the company.
Jignesh Shail of Quant Securities said,
At upper band, the company is valued at Rs477.2bn, quoting at 9.6x risk weighted received premium (RWRP) for FY16 which is quite low compared to our estimate of ~15x for our ICICI bank SOTP valuation. The valuation is also reasonable considering recent merger of Max life with HDFC life has quoted the value for HDFC Life Insurance at Rs470bn with market share of ~7.6% against IPru Life’s share of ~11.3%. Considering healthy business momentum, rising penetration for insurance sector as well reasonable valuations for the company, we recommend SUBSCRIBE to the issue.
