Thank you, So around 13.8% growth in EV for Life Insurance business from 2019 to 2020. The previous year it was 14.4% growth. HDFC Life grew at 17% from June 2019 to June 2020. Considering a multiple of 2 for Life Insurance business it is worth 11,000 Crore roughly as it doesn’t demand same EV as HDFC Life yet. The only question is when there is a plan to list insurance business separately will they do right by the shareholders of Aditya Birla Capital. If they do then its a no brainer investment at this price.
SBI Life & ICICI Pru trade at 3x price / ev while HDFC Life trades at 5.5x - 6x. My view is that AB Sun Life will get a multiple closer to 3x. Do keep in mind that AB Cap owns 51% so AB Cap’s share will 9,000 cr at this valuation.
2 Likes
Over time I have learnt not to invest in a company for the part business I like. Many times value unlocking doesn’t happen, takes very long time, happens in a way I end up taking selling decision due to uncertainty, the business I like is suddenly sold etc etc.
I have trained myself to stay away from such businesses however attractive they look. I would rather invest in pure play business if available in listed form or wait for any company in that space to list in pure play form.
Disc: Had earlier invested and sold Max group shares, ABC & L&T FH. Trained to stay away from such complex promoters/structures. Currently invested in HDFC Life and SBI Life. Not a buy/sell recommendation. Sharing thoughts on investing in a group for liking a part of their business.
4 Likes
Appreciate it, thank you.
I have invested a small portion in HDFC Life which was the first choice in this space but I’m not comfortable with the current valuations to invest more. I was looking for health insurance products for family during covid-19, when I came across AB Capital, liked the product, approach and felt it was an interesting company after looking at vertical wise business. However I invested in it mainly because of the Insurance business as it was at a compelling valuation and considering growth prospects in the filed. May or may not work out but have some margin of safety with respect to price and will exit if it doesn’t work out.
2 Likes
May we have segment wise revenue/profit of AB Capital
This “value pick” is paying off handsomely. The stock has now convincingly broken previous resistances and reversed the one way downmove since listing. Promoter buying recently
disc. invested
1 Like
Acc to the article, ABC may dilute 20% in ABSL MF next quarter at a valuation of 26,000 cr. Fundraising plans also in the works in other business lines.
disc. Invested
1 Like
Will existing ab cap investors get amc share or not in this ipo?
Disc.invested
HDFC Securities initiates coverage on Aditya Birla Capital
1 Like
ABSL AMC IPO approved.
2 Likes
Aditya Birla insurance has way below vnb margin than sbi life and Icici Pru. Aditya Birla life vnb margin never touched double digit. SBI life VNB Margin at near about 20% and Icici Pru north of 25%. Both have well backed by parent bank branch .Aditya Birla Life business was at pecarious condition before company started to enter into tie with HDfC bank and few more. 3 times EV is quite a tall ask for Aditya Birla life.
1 Like
Interviews today:
Read this in the ET today. AS is one of the highest paid CEOs in the industry and has been among the worst performers in his peer group. Will be a major positive for ABC if they actually replace him with someone good.
https://economictimes.indiatimes.com/magazines/panache/suits-sayings-freshly-minted-unicorn-in-trouble-with-investors-new-mandate-at-play-in-morgan-stanley-serial-entrepreneurs-s-fixation/articleshow/82023918.cms @jeewangarg
2 Likes
Can we have a link for the same
Very strong results from AB Cap.
Full results here: https://www.bseindia.com/xml-data/corpfiling/AttachLive/6ec3cef8-6110-4b8c-9525-dad0cf095adc.pdf
disc. Invested
ABSL AMC IPO priced at 20,500 cr (35x FY22e PAT). Listing on Oct 11. They’ve sensibly left some value on the table this time around, unlike the ABC IPO
1 Like
Third consecutive quarter of strong performance. H2 should be better than H1 based on guidance. No equity dilution planned for next 2.5 years and dividend policy in the works.
disc. Invested
1 Like
Good article summarising Ajay Srinivisan’s performance as ABC CEO [paywall]. The authors seem to think he’s on his way out, but we’ve heard these rumours before so only time will tell.
There is lot of buying happening from the promoter group from last few days.
1 Like