Standard Life, which is looking to offload about 3.46 per cent stake to raise up to Rs 4,606 crore, is among the promoters of the life insurer, according to a term sheet issued by BofA Securities and JP Morgan.
Shares of
Insurance fell over 3 per cent to Rs 672.15 on Tuesday. However the counter was trading with minor cuts at Rs 693.20 at 10 am. BSE Sensex was trading at 52,590.86, down by 144.74 points, or 0.27 per cent, at the same time.
On BSE, about 10.1 crore shares had changed hands in morning against the daily average of 1.45 lakh. On NSE, over 2.05 crore shares of the company were traded. Bulk deal data will be released post-market hours. Total turnover on BSE stood at Rs 7,346.80 crore. On NSE, shares worth Rs 1,413.4 crore were traded at the time of writing this report.
The sale price has been fixed at Rs 658-678 apiece, a 3 to 5 per cent discount to Monday’s closing price of Rs 696. As of September 30, 2020, Standard Life held 8.88 per cent stake in the company.
Standard Life sold 2.78 crore shares of the insurance company in December last year to raise about Rs 1,700 crore to reduce its stake from 10.27 per cent to 8.88 per cent.
Shares of HDFC Life Insurance have underperformed the benchmark indices. The counter is up merely 3 per cent in 2021 so far.
The UK-based firm has divested nearly 26.12 per cent stake in HDFC Life since its IPO in November 2017. Standard Life held 35% stake in the pre-initial public offer, which was reduced to 8.88 per cent at the end of December 2020. After Monday’s deal, Standard Life will hold 5.42 per cent in HDFC Life.
Brokerage firm Prabhudas Lilladher has upgraded HDFC Life Insurance to a ‘hold’ rating and increased the target price to Rs 725 on the counter.
“HDFC Life underperformed benchmarks in the last six months on the back of second COVID wave challenges such as risks from claims and lockdown-led limited activity on the protection side. The company retains a valuation premium of 65-70 per cent to its listed peers and we expect return delta should be much lower with limited triggers in near term,” it added.
