Health Care

HDFC Standard Life IPO oversubscribed 1.17 times on Day 2

HDFC Standard Life has set a price band of Rs275-290 per share.

HDFC Standard Life, whose initial public offering is an offer-for-sale that opened on Tuesday, is the third Indian life insurer that has gone in for listing of its shares on the bourses. Till yesterday, the IPO got subscribed 46 percent. The portion meant for qualified institutional buyers (QIBs) was subscribed 3.69 times, non-institutional investors (50 per cent) and retail investors 36 per cent.

On Monday, as part of its anchor book allocation, HDFC Standard Life allotted shares worth Rs2,322 crore to institutional investors, including sovereign wealth funds of Singapore government, Abu Dhabi Investment Authority and Norwegian sovereign wealth fund Norges.

Data available with NSE showed that the issue had received bids for 25,78,71,850 shares, which was 1.18 times of the issue size of 21,97,59,218 shares. The list includes General Insurance Corporation, SBI Life Insurance Co, ICICI Lombard General Insurance, New India Assurance and Reliance General Insurance Co. and ICICI Prudential Life Insurance, which became the first life insurer in India to go public. According to merchant banking sources, promoters are expected to get about Rs 7,500 crore from the stake dilution.

The IPO comprises sale up to 29.98 crore equity shares, representing about 14.92% of its equity share capital for cash, through an offer for sale by HDFC and Standard Life Mauritius.

HDFC owns 61.65% and Standard Life 35% in the insurance company, while minority shareholders owns the ret. Mortgage lender HDFC Ltd's shares declined 1.12% on the BSE on Tuesday at Rs 1,764.25 apiece.

It plans to raise ₹8,695 crore through the IPO, the most by a private company in nearly a decade. At the upper end of the price band, HDFC Standard Life Insurance will be valued at Rs58,277 crore.

After the Insurance Regulatory and Development Authority had turned down the merger proposal, both companies had said that they would file a revised merger structure, but it did not materialise. The global coordinators and book running lead managers of the IPO are Morgan Stanley India Company, HDFC Bank, Credit Suisse Securities (India), CLSA India and Nomura Financial Advisory and Securities (India).

HDFC Standard Life Insurance Company is among the top three life insurers in India by market share in new business premium, one of the most profitable life insurers based on the value of new business (VNB) margins and among the top five private life insurers in India.

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