SBI Life Insurance is a JV between State Bank of India (SBI-70%), and BNP Paribas
Cardiff (26%). The insurer’s new business premium grew 35% from FY15 to FY17;
it has a leadership position with 20% market share in New Business Premium
(NBP) in FY17.
Outlook & Valuation: We believe the Indian Life Insurance industry is in a phase
of high growth and lower penetration will ensure the growth remaining higher for
next couple of years. SBI Life with its strong brand name and wide distribution
network is one of the best plays for Indian Life Insurance industry. At the upper
price band of `700 the issue is offered at 4.2x its Embedded Value of `16,538cr,
little higher than 3.8x for ICICI Prudential. We believe the premium valuation for
SBI is justified due to its higher incremental market share gain, and hence we
recommended investors to “SUBSCRIBE” to the issue with long term perspective.

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