HDFC Life shares soar 6% today. Experts see more gain after fresh breakout

HDFC Life shares soar 6% today. Experts see more gain after fresh breakout

HDFC Life share price today shot up around 6 per cent ahead of company’s board meeting scheduled tomorrow. The life insurance company had informed Indian exchanges that company’s board meeting will take place on 3rd September to approve issue of equity shares through preferential allotment. The market has gone bullish after this money raise drive of the company and this rise in HDFC Life share price is expected to continue further as the stock has given fresh breakout today at ₹747. Stock market experts have advised investors to buy HDFC Life shares at current market price for short-term target of ₹850.

Speaking on the re3ason for rise in HDFC Life share price; Avinash Gorakshkar, Head of Research at Profitmart Securities said, “HDFC Life is planning to raise some funds through issuance of equity shares through preferential allotment. The company has informed about this to the Indian exchanges and the scheduled board meeting for approval to this fund raise programme of the company is tomorrow. Market has gone bullish on HDFC Share price due to this reason.”

Standing in sync with Avinash Gorakshkar’s views; Ravi Singhal, Vice Chairman at GCL Securities said, “The stock has broken flat pattern after 19 weeks consolidation and it has given fresh breakout today at ₹747 per stock levels. So, the stock is looking highly bullish in immediate short-term and my suggestion to stock market investors is to initiate momentum buy in HDFC Life shares at current market price as it may go up to ₹850 in next one month from here. However, one must maintain strict stop loss at ₹744 while taking this position in HDFC Life.”

Recently, HDFC Life Insurance Company had informed Indian exchanges about the board meeting to approve issuance of equity through preferential allotment. The BSE informed about the communication citing, “HDFC Life Insurance Company Ltd. informed BSE that the meeting of the Board of Directors of the Company is scheduled on 03/09/2021, inter alia, to consider and approve issue of equity shares and/or other securities of the company by way of preferential allotment, subject to such approvals as may be required under application law, and to consider convening of a meeting of the shareholders' of the Company to obtain approval for such issue, if required.

Subscribe to Mint Newsletters * Enter a valid email * Thank you for subscribing to our newsletter.

HDFC Life Insurance shares hit 52-week high on fundraising plan

live bse live

nse live Volume Todays L/H More ×

HDFC Life Insurance Company share price touched a 52-week high of Rs 775.65 rising percent intraday on September 2 after the company said its board is going to consider fundraising on September 3.

“A meeting of the board of directors of HDFC Life Insurance Company is proposed to be held on Friday, September 3, 2021, to consider the issue of equity shares and/or other securities of the company by way of preferential allotment,” the company said in a release.

Catch all the market action on our live blog

It is subject to such approvals as may be required under applicable law, and to consider convening of a meeting of the shareholders of the company to obtain approval for such issue, if required, it added.

At 13:25 hrs, HDFC Life Insurance Company Limited was quoting at Rs 760.60, up Rs 41.10, or 5.71 percent on the BSE.

HDFC Life rallies 5%, hits record high ahead of board meet for fund raising

Shares of rallied 5 per cent to hit a fresh record high of Rs 758.50 on the BSE in the intra-day trade on Thursday ahead of a board meeting on Friday scheduled to consider fund raising plan. The stock of the private insurer surpassed its previous high of Rs 746, touched on March 9, 2021.

“A meeting of the board of directors of Company is proposed to be held on Friday, September 3, 2021 to consider issue of equity shares and / or other securities of the Company by way of preferential allotment,” the company said in exchange filing on Tuesday, August 31, 2021.

In the past one month, the stock has outperformed the market by surging 13 per cent as compared to a 9 per cent rise in the S&P BSE Sensex. However, over the past six months, it has underperformed by gaining only 5 per cent, as against a 15 per cent rally in the benchmark index.

HDFC Life is a joint venture between HDFC Ltd., India’s leading housing finance institution, and Standard Life Aberdeen, a global investment company. HDFC Life is a leading long-term life insurance solutions provider in India, offering a range of individual and group insurance solutions that meet various customer needs such as protection, pension, savings, investment, annuity and health.

The current pandemic has led to higher awareness around the need for protection and the inadequacy of current insurance coverage at a household level. Life insurance has emerged as a prominent theme to protect one’s family whilst securing long-term financial goals.

The company’s management believes that life insurance in India is a structural long term growth opportunity given the under-penetration. “In addition, pandemic-induced awareness, shift in consumer behaviour and robust demographic trends indicate that we are well placed to capture these multi decade opportunities,” the management had said in the financial year 2020-21 annual report.

“Meanwhile, in April-June (Q1FY22), HDFC Life saw a steep rise in death claims, with peak claims in the second Covid wave at around 3-4 times of peak claims in the first wave. The company cleared around 70,000 claims in Q1, with gross/net claims amounting to Rs 1,600 crore/Rs 960 crore. The company has created an additional reserve of about Rs 700 crore. However, near-term uncertainties persist,” analysts at Emkay Global Financial Services said in result update.

HDFC Life continues to focus on the diversified distribution channel to create a balanced product mix for optimum profitability. Its balanced product mix provides cushion against business cyclicality while taking advantage of the underpenetrated protection market. Management avoids group protection plans due to the lack of profitable underwriting.

Emkay Global expects the trend in margins to remain stable with a balanced product mix and a gradual rise in the share of protection and annuity plans along with increasing penetration in deeper geographies. It maintains ‘buy’ rating on the stock with target price of Rs 870 per share.