HDFC Standard Life Shares End Higher After 1.4% Equity Changes Hands
Standard Life held over 10% stake in the Indian insurer according to latest shareholding data.
Shares of HDFC Standard Life Insurance Ltd. rose on Thursday after 2.8 crore shares exchanged hands in a single large trade on the bourse.
The shares exchanged amount to 1.4% of the total equity, according to Bloomberg data. Buyers and sellers of the trade remain unknown.
A unit of Standard Life Aberdeen planned on selling 2.78 crore shares, according to terms of the deal obtained by Bloomberg News. Shares were being offered between Rs 606 and Rs 636.5 apiece. The price range represented a discount of 0.03%-4.98% from Wednesday’s closing price. Standard Life seeks to raise up to Rs 1,770 crore through this deal.
After this transaction, there will be a lock-in period on Standard Life from carrying out any more large trades until March 29, 2021.
Past Divestments
U.K-based Standard Life has been divesting stake in the private insurer at regular intervals since last year.
Based on the latest shareholding pattern, Standard Life held 10.27% stake in the company, as on Sept. 30.
It had earlier sold over 4 crore shares worth Rs 1,890 crore on June 4. Shares of HDFC Life had ended with gains of over 3% that day.
Standard Life had also announced plans to sell up to 5 crore shares, after markets closed on March 26. Over the next two sessions, the stock declined by 7.6% and 6.5% respectively.
A similar divestment had taken place in October 2019, when Standard Life sold 4.95% stake for just over Rs 5,750 crore. Shares had ended with gains of over 3.5% on Oct. 30.
Shares of HDFC Life ended 1.9% higher at Rs 648.55, post the deal. The stock has snapped a four-day losing streak.
Jefferies anticipates an 18% annualised growth in premiums of HDFC Standard over FY20-23. It expects a 17% annualised growth in value of new business and a return on embedded value of 18% in FY22. It has maintained its ‘Buy’ rating on the stock with a target price of Rs 800.
Out of the 33 analysts that track HDFC Life, 20 have a ‘Buy’ recommendation, eight suggest ‘Hold’ while five have a ‘Sell’ call. Based on Bloomberg consensus data, the stock has a return potential of 1%.