Started in August 2000, HDFC Standard Life Insurance Company Limited is Mumbai based life insurer and among the top three private life insurers in terms of market share based on total new business premium between Fiscal 2015 and Fiscal 2017, according to CRISIL. HSLICL was the first private life insurance company to register in India and was established as a joint venture between HDFC and Standard Life Aberdeen plc, initially through its wholly owned subsidiary The Standard Life Assurance Company and now through its wholly owned subsidiary, Standard Life Mauritius. Company's bancassurance partners include banks, non-banking financial companies, micro-finance institutions and small finance banks in India. Their number of major bancassurance partners grew from 31 as at March 31, 2015 to 120 as at June 30, 2017. Their top 15 bancassurance partners (in terms of total new business premium sourced for the period ended June 30, 2017) had over 11,200 branches across India as at June 30, 2017. They had 58,147 individual agents as at June 30, 2017, which comprise 6.1% of the all private agents in the Indian life insurance industry. They have a pan-India presence, comprising 414 branches and spokes across India as at June 30, 2017, supported by a dedicated workforce of 15,406 full-time employees.. They have a broad, diversified product portfolio covering five principal segments across the individual and group categories, namely participating, non-participating protection term, non-participating protection health, other non- participating and unit-linked insurance products. As at June 30, 2017, their product portfolio comprised 31 individual and ten group products, as well as eight optional rider benefits. In Fiscal 2012, HSLICL established its wholly-owned subsidiary, HDFC Pension, to operate their pension fund business under the National Pension System. As at March 31, 2017, HDFC Pension had approximately Rs 11,629.8 million of AUM from customers enrolled under the National Pension System. and is the second largest private pension fund management company in India in terms of assets under management and subscribers in Fiscal 2017, according to CRISIL. In Fiscal 2016, HSLICL established its first international subsidiary in the UAE, HDFC International, to operate their reinsurance business. HDFC International has signed reinsurance treaties for two distinct lines of individual life business and entered into arrangements to offer reinsurance for group and credit life schemes. On performance front, HSLICL has posted income/net profits of Rs. 461.15 cr. / Rs. 447.23 cr. (FY13), Rs. 881.47 cr. / Rs. 238.93 cr. (FY14), Rs. 874.17 cr. / Rs. 69.59 cr. (FY15), Rs. 900.03 cr. / Rs. 816.79 cr. (FY16) and Rs. 1016.72 cr. / Rs. 107.79 cr. (FY17). For three months ended on 30.06.17 of the current fiscal, it has reported net profit of Rs. 315.83 cr. on a income of Rs. 336.20 cr. Thus company has posted healthy growth over last couple of years on consistent basis and also company has shown good growth in policy premium revenue also. HSLICL has posted an average EPS of Rs. 4.2 and average RoNW of 28.3% for last three fiscals. Issue is priced at a P/BV of 13.1. If we attribute latest earnings on fully diluted equity post issue, then asking price is at a P/E of around 45.97. ICICI Pru and SBI Life are peers of company and trading at P/E of 33 and 70 (as per market price on 26th October 2017). As per financials, company's growth is good, RoNW is 28.3% for last three fiscals and issue is priced at P/E of around 46. Life insurance sector is expected to fare better and industry experts are very positive on this sector, but recent listings in insurance sector are not very promosing. So we give 'NEUTRAL' rating to this IPO.
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