SBI Life Insurance Company today made its debut on the Bombay Stock Exchange at Rs 733.30, a premium of 4.75 per cent over its issue price of Rs 700. The stock opened at Rs 733.30 and touched a high of Rs 738. On the National Stock Exchange, the stock opened at Rs 735, with a premium of 5 per cent over its issue price. SBI Life's initial share sale offer was opened on September 20 and closed on September 22. This was the second listing of a life insurer after ICICI Prudential Life Insurance, which went public last year.
The performance of the SBI Life stock is in line with the prediction made by some analysts. In one such prediction ahead of the IPO launch, Angel Broking had said that SBI Life has a well balanced portfolio (ULIP - 50.5 per cent, non participating - 34.7 per cent and participating - 15.4 per cent) and is well capitalised with a solvency ratio of 211 per cent (mandatory - 150 per cent). This will ensure growth without dilution in the coming years, boosting the return on equity (RoE) from current level of 17 per cent, the company said.
Reliance Securities had also considered SBI Life IPO a healthy investment opportunity. In a statement , it said: "Being the market leader in new business premium, we expect SBI Life to be a key beneficiary of strong growth in Indian life insurance industry over the next few years owing to low life insurance penetration, rising income level and higher preference for financial assets (such as insurance)."
SBI Life's Rs 8,400-crore IPO was oversubscribed 3.58 times and the portion meant for qualified institutional buyers was oversubscribed 12.56 times. According to NSE data, non- institutional investors received 70 per cent subscriptions and retail investors 85 per cent. SBI Life is a joint venture between India's largest lender State Bank of India and BNP Paribas Cardif, the insurance holding company of France.
SBI Life is country's largest private life insurer, in terms of new business premium generated in each fiscal year since fiscal 2010. The company's market share of new business premium increased from 15.87 per cent in fiscal 2015 to 20.04 per cent in fiscal 2017. It also increased market share of new business premium in the entire life insurance industry, from 4.89 per cent in fiscal 2015 to 5.80 per cent in fiscal 2017.
SBI Life earned Rs 313.48 crore in net profit for the quarter ended June 30, 2017. For the year ended March 31, 2017, the private sector insurer earned Rs 954.6 crore in net profit against Rs 844.1 crore net profit for the year ended March 31, 2016.