ICICI Prudential Life Insurance Co (IPLIC) is the largest private insurer with 10% market share on APE basis and manages Rs1.04 trillion of AUM. The company is riding on ULIP business (82% mix) which has lower regulatory risk, lower capital requirement and long term opex benefit, but also has lower margins and is highly dependent on capital market performance.
Prabhudas Lilladher has recommended 'Subscribe' to IPO of ICICI Prudential Life Insurance. Commenting on the investment rationale, the stock broker said, ''Company from here on is focusing to improve it protection business share which is high margin and moderate opex. Hence, we believe RoEV could improve to 18-19% in medium term from 15% currently and improve post over-run margins to ~11% by FY18 from 8% currently. At the upper band of Rs 334, the company would trade at 2.43x Sep-18 EV which we believe is fully priced and hence we recommend to Subscribe for long term gains.''
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