SBI Life's Rs 8,400 crore IPO opens today, brokerages give it a thumbs up

Fair value and strong brand of the IPO has made brokerages encourage subscription to the IPO

India's largest public sector bank State Bank of India opened its initial public offering of SBI Life of Rs 8,400 crore on Wednesday. By size, SBI life IPO is expected to be the largest in life insurance space in India.

The IPO that opened on Wednesday will close on September 22. The equity shares are proposed to get listed on both NSE and BSE. SBI Life's price band has been fixed at Rs 685-700 per equity share for a total of 12 crore shares. The shares are on sale by the promoters of the face value of Rs 10 each.

The 12 crore shares include an offer for sale of up to 80 million equity shares by State Bank of India and up to 40 million equity shares by BNP Paribas Cardif S.A. Brokerages are of the opinion that the stock looks fairly valued and have advised subscribing to the issue due to its strong distribution network, brand value, superior product mix and healthy growth.

In Financial Year 2017, SBI Life's embedded value was Rs 16,537.9 crore as of March 31, 2017. Their value of new business was Rs 1,037 crore while annualized premium equivalent stood at Rs 6727 crore for FY17. The IPO offer would constitute up to 12 per cent of post-offer paid-up equity share capital and the net offer shall constitute 10.60 per cent of the post-offer paid up equity share capital.

OneIndia News