Shares of HDFC Life Insurance Company skyrocketed after the big deal

Shares of HDFC Life Insurance Company rose 2% on BSE up 606 in early trades on Tuesday after UK-based investment firm Abrdn said it was planning to sell 4.3 crore shares of the private sector insurer through a block deal, PTI reported.

Abrdn is planning to sell up to 4.3 crore of shares representing 2% of all outstanding shares of HDFC Life through a block agreement to raise capital. 2.425 crore. Reuters also reported on Tuesday that British asset manager Abrdn plc will sell shares of HDFC Life via block trading on Tuesday.

The Edinburgh-based company, formerly known as Standard Life Aberdeen, has offered shares within the price range of 564.1-578.55, down to 2.5% at script close on Monday in block deal.

Share ownership of Abrdn, one of the insurer’s boosters, will drop to 1.7% once the transaction is made from 3.7% currently, according to the terms sheet. Major mortgage firm HDFC, another pusher in the private sector insurance sector, will continue to hold a 48.7% stake in the company. Bofa Securities is the only company that sells shares.

HDFC Life reported a 21% increase in net profit at 365 crore in the first quarter ending June was driven by top growth coupled with higher renewal rates boosting margins. Its total premium has increased 23% to 9,396 crore words 7,656 crore a year ago. New business margin increased to 26.8% from 26.2% on the back of a profitable product mix and protective business growth.

Due to the acquisition of Exide Life Insurance in January 2022 for which it received NCLT approval, it has become a wholly owned subsidiary of the company and the agreement is supplemented 20,000 crore for AUM, take all consolidated assets under management 2.5 lakh crore, incl 30,000 crore fund of its retirement subsidiary.

Shares of HDFC Life Insurance Company have underperformed as it is down more than 9% in 2022 (YTD) so far compared to the benchmark Sensex’s more than 2% gain during that time.

(With input from PTI)

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