SBI Life Insurance shares make stellar market debut, lists at 5 per cent premium over IPO price

SBI Life Insurance Company made a stellar debut on the stock markets by getting listed at Rs 735, a 5 percent premium against its initial public offer (IPO) price of Rs 700 per share on the National Stock Exchange (NSE).

At 10:02 AM; the stock was trading at Rs 734 on the NSE. It hit a high of Rs 740 and low of Rs 730 so far. A combined 11.5 million shares exchanged hands on the NSE and BSE.

The company’s Rs 8,400 crore IPO was subscribed 3.587 times. The portion meant for qualified institutional buyers (QIBs) was oversubscribed 12.56 times, while that of non-institutional investors received 70% subscriptions and retail investors 85%, data available with the NSE showed.

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 Insurance is the largest private insurer in terms of new business premium (NBP) generated with 20.04% market share and has assets under management (AUM) of Rs 97,700 crore.

The company is riding on ULIP business (71% APE mix) which has lower regulatory risk, lower capital requirement and long term opex benefit, but also has lower margins and is highly dependent on capital market performance.