ABM Equity Research in its research report on ICICI Prudential Life Insurance company IPO ICICI Prudential Life Insurance Company Ltd (IPRU) is currently the largest private sector life insurance company with an AUM of `1.09 tn and market share of 11.3% as on Q1FY17. Amongst private sector, IPRU has a market share of 21.7% which is commendable considering the large number of private sector life insurers. IPRU has a very strong franchise in life insurance business and is well-poised to cater to the underpenetrated Insurance market of India. IPRU is a joint venture between ICICI Bank and Prudential wherein ICICI Bank holds ~67%. IPRU offers its customers a range of life insurance, health insurance and pension products & services. The company is not raising fresh capital through this IPO as ICICI Bank sells 18.1 crore shares at price band of 300- 334. There is 10% reservation for shareholders of ICICI Bank and hence, the retail shareholders can apply under both categories (shareholder quota and net issue). IPRU has consistently maintained strong RoE of 30%+ and healthy dividend payout ratio of 40% and hence, we believe that the stock will command healthy valuation. Besides, the strong solvency ratio of 320% provides comfort to us. On the back of this, we recommend investors to Subscribe the stock for listing gains as well as long term gains.
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