SBI Life gains 2% on debut

SBI Life's Rs 8,400-crore initial public offering last month had received 3.6 times demand than the shares on offer

SBI Life Insurance Company on Tuesday made a tepid trading debut, with the stock gaining less than two per cent on the National Stock Exchange (NSE). The shares of the State Bank of India (SBI)-backed life insurer closed at Rs 713.3, compared to the issue price of Rs 700. The stock touched a low of Rs 701.7 and a high of Rs 740 on the NSE. A total of Rs 2,565 crore worth of SBI Life shares changed hands on the NSE, and another Rs 361 crore on the BSE. 

SBI Life’s Rs 8,400-crore initial public offering (IPO) last month had received 3.6 times demand than the shares on offer. Bulk of the bids (nearly 85 per cent) came in from institutional investors, while the retail and high net worth individual (HNI) portion of were not fully subscribed. SBI Life’s market value currently is Rs 70,800 crore.

 The stock trades at 12 times the price-to-book and 73 times its 2016-17 earnings. It trades at 4.2 times its embedded value (EV) for 2016-17, higher than peers such as ICICI Prudential Life Insurance Company. Most brokerages had advised their clients to subscribe to the offering with a long-term investment horizon. 

SBI Life’s listing had a positive rub-off effect on ICICI Prudential Life, with its shares gaining six per cent on Tuesday.