HDFC Life Insurance rises 4% on huge block deal

Shares of HDFC Life Insurance Company surged over 4% in early trade on Tuesday after a huge block deal was executed in the counter. As per a report, around 4.3 crore shares, or 2% stake of the company, changed hands, but the names of the buyer and seller of the equity shares were not immediately ascertained.

At 10: 20 AM, the share price of HDFC Life Insurance was trading at ₹592.35, up 2.15% on the Bombay Stock Exchange (BSE). The largecap stock opened with a gain of 3.64% at ₹601, against the previous closing price of ₹579.90, while it gained as much as 4.5% to hit a high of ₹606 in the first hour of trade so far. In comparison, the BSE Sensex was trading 403 points higher at 60,517 levels, following strong cues from global peers.

HDFC Life shares trade 22% lower than its 52-week high of ₹759.60 touched on August 19, 2021, while it hit a 52-week low of ₹497.30 on March 8, 2022. The counter has delivered a negative return of around 9% in the calendar year 2022, while it rose 15% in the past six months. The stock has risen 3.6% in one month and 2.5% in a week. The market capitalisation stood at ₹1.25 lakh crore at the time of reporting.

On the volume front, there was strong volume as 434 lakh shares worth ₹2,490 crore changed hands over the counter in the first hour of trade as compared to the two-week average volume of 0.75 lakh scrips.

According to a report, Abrdn Plc, a United Kingdom-based global investment company, was expected to sell 4.3 crore shares in the company through a block deal at a price band of ₹564-578.5 apiece. Abrdn Plc, previously known as Standard Life, is expected to raise up to $313 million via stake sale. It is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index.

Last Friday, HDFC Life allotted 3.57 crore equity shares to Housing Development Finance Corporation (HDFC), one of the promoters of the company, on a preferential basis for raising ₹2,000 crore.

“The capital raising committee of its board has vide its resolution allotted 3,57,94,824 equity shares at a price of ₹558.74 per share (including premium of ₹548.74 per share), aggregating to ₹2,000 crore, to HDFC,” the company said in a BSE filing on September 9.

“Post the above allotment, paid‐up equity share capital of the company stood at ₹21,490,547,510, comprising 2,149,054,751 equity shares of face value of ₹10 each,” it added.

The private life insurers reported steady premium growth in the month of August, with individual annual premium equivalent (APE) growing by 20% year-on-year (YoY). Growth in total APE remains strong at 19.2% YoY.

For April-June quarter of 2022 (Q1 FY23), HDFC Life reported a 21% YoY growth in net profit to ₹365 crore, driven by revenue growth along with higher renewal ratio that boosted margins. Total premium rose 23% to ₹9,396 crore during the quarter from ₹7,656 crore a year earlier, the life insurer said, adding the first-year premium income rose 27% to ₹4,776 crore. During the quarter under review, the APE grew 22% to ₹1,904 crore, helping it maintain the top 3 ranking amongst life insurers including LIC and of this, individual APE grew 19% to ₹1,548 crore.