A year ago, a multi-structure merger transaction between HDFC Life Insurance and Max Life had aimed to create the largest private sector insurer, and it pinned a valuation of Rs45,000 crore on HDFC Life alone. But there are enough factors to support HDFC Life in commanding the valuation envisaged by the merger deal last year. HDFC Life has a stronger franchise as its direct business network of branches contributes to more than half of the new business premium. But if HDFC Life is viewed in a different light—that of past transactions—then valuations begin to look a bit frothy. If not for its strong business metrics, exuberant markets may help HDFC Life’s IPO sail through without breaking a sweat.

Source: Mint August 21, 2017 02:15 UTC