SBI Life Shares Fall After Multiple Large Trades Worth Rs 4,246 Crore
BNP Paribas intended to sell close to 5 crore shares of the company through an accelerated placement.
Shares of SBI Life Insurance Co. declined after more than 4.6 crore shares of the company exchanged hands in 10 large trades.
The large deals took place between Rs 901 and Rs 915 apiece, aggregating to Rs 4,246 crore, according to Bloomberg data.
Based on the term sheet accessed by Bloomberg News, BNP Paribas intended to sell over 3.5 crore shares of the company through an accelerated placement. The term sheet also suggested that BNP Paribas had an option to increase the deal size by another 1.5 crore shares. The shares were to be offered between Rs 870 and Rs 917 apiece.
According to the December quarter shareholding pattern, BNP Paribas held 5.2% stake in the company. The company last pared stake in the insurer in March and June 2019.
ICICI Securities estimates SBI Life Insurance may reach an embedded value of Rs 44,300 crore in FY23E based on an average 15% growth in annualised premium equivalent and about 21.5% value of new business margin for FY22-23E. "As experience improves in terms of persistency, mortality and cost, there is scope for improvement in VNB margins if volumes support in Q4FY21."
Shares of SBI Life Insurance fell as much as 4.2% to Rs 901.2 and are down for the second straight day. According to Bloomberg data, of the 39 analysts that track the company, 36 have a 'buy' rating while three suggest 'hold'. The average of 12-month price targets imply a return potential of 18.6%.