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Recovery in premium growth to be key for re-rating

* The board of IPRU Life has approved the appointment of Mr. Anup Bagchi as MD and CEO for a period of five years, effective 19th Jun’23, subject to regulatory and other approvals. For a seamless transition, he is appointed as Executive Director and Chief Operating Officer, effective 1st May’23.
* Accordingly, Mr. Bagchi, who holds the position of Executive Director at ICICI Bank and heads the wholesale banking business, has resigned, effective 30th Apr’23. We await details on the new wholesale business head at ICICIBC.
* The tenure of current MD and CEO, Mr. N. S. Kannan, will end on 18th Jun’23, post which he will superannuate from the company. He has been MD and CEO for five years since 19th Jun’18.
* IPRU has successfully navigated the Covid-19 crisis under Mr. Kannan’s leadership and is on track to achieve its stated guidance of doubling the FY19 VNB by FY23. However, modest premium growth due to pressure from the banca channel has kept the overall stock performance under pressure.
* We, thus, believe that while IPRU has maintained healthy traction in VNB, led by improving product mix in favor of higher-margin products, the recovery in premium growth would be key for re-rating. Over FY23-25, we estimate IPRU to deliver a 12% CAGR in VNB and ~10% growth in APE, with operating RoEV of ~16%. We have a BUY rating on the stock with a revised TP of INR530 (based on 1.7x Sep’24E EV).

IPRU approves appointment of Mr. Anup Bagchi as MD & CEO for five years

The board of IPRU has approved the appointment of Mr. Anup Bagchi as MD and CEO for a period of five years, effective 19th Jun’23, subject to regulatory and other approvals. For a seamless transition, he has been appointed as Executive Director and Chief Operating Officer, effective 1st May’23. He is currently working as Executive Director of ICICIBC and Non-Executive Director of IPRU since Oct’18. He joined the ICICI Group in 1992 and has worked in the areas of retail banking, corporate banking and treasury. In his prior role, he was MD and CEO of ICICI Securities.

Current MD & CEO to superannuate; IPRU on track to achieve VNB target

The tenure of current MD and CEO, Mr. N. S. Kannan, will end on 18th Jun’23, post which he will superannuate from the company. He has been MD and CEO for five years since 19th Jun’18. Under his leadership, IPRU has successfully
navigated the Covid-19 crisis and built a well-diversified franchise to capture growth opportunities. Thus, IPRU seems to be on track to achieve its stated guidance of doubling the FY19 VNB by FY23 and improved the margin profile
despite various challenges. However, premium growth has been subdued, which has dented the overall performance.

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