India has seen a record year for IPOs with initial share sales topping $11 billion so far in 2017. But high valuations, especially for some recent big insurers, have led to weak trading debuts. HDFC Life's IPO was the fourth billion-dollar plus IPO this year. State-run General Insurance Corp, which listed on October 25 after a $1.7 billion IPO that was the biggest this year, is trading 11.6 per cent lower than its IPO price of Rs 912. And New India Assurance Co Ltd, the biggest non-life insurer and whose IPO raised $1.5 billion, fell around 9 per cent this week.
HDFC Life's rival SBI Life has also shed 6.4 per cent since its listing last month after a $1.3 billion IPO. HDFC Life was priced at 4.7 times its 2017/18 embedded value versus SBI Life's 3.9 times and ICICI Prudential's 3.4 times, brokerage Centrum said in a pre-IPO note.
HDFC Life's two main shareholders - Housing Development Finance Corp and Standard Life - sold a combined 15 per cent stake in the insurer's IPO which was subscribed nearly five times.
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