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SBI Life Insurance Company Ltd. (SBI Life) was formed as a Joint Venture between the State Bank of India and BNPPC in 2001. State Bank of India was India’s largest commercial Bank in terms of deposits, advances and number of branches, as of March 31, 2017. BNPPC, an Insurance subsidiary of BNP Paribas, with operations across 36 jurisdictions internationally, is among the leading credit life insurance businesses globally. SBI Life is India’s largest private life insurer, in terms of New Business Premium generated in each fiscal year, since FY10. Between FY15 and FY17, its New Business Premium increased at a CAGR of ~35%, which is the highest among the top five private life insurers.

SBI Life is India’s largest private life insurer, in terms of New Business Premium, a position the company has maintained since FY10. Its renewal premium growth has increased at a CAGR of 24.2% from FY14 to FY17, highest among the top 4 private life insurers in India and also holds a commanding 20% share in New Business Premium in the private life insurance market. At the price band of 685-700 the asking valuations are ~4.1-4.2x its FY17 Embedded Value of 165/- per share as compared to P/E.V. of 3.75 of ICICI Prudential Life Insurance currently. We believe the premium valuations compared to ICICI Prudential Life Insurance and Max Financial Services are justified due to higher renewal premium growth over three years (FY14-FY17), higher 37th month and 61st month persistency ratio, lower mis-selling, and higher Operating Return on Embedded Value. We advice investors with a long-term investment horizon to SUBSCRIBE to the issue.

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