Last month, IRDA issued draft guidelines for life insurance companies in India, to release their Initial Public Offer (IPO).
As per the IPO guidelines, life insurance companies which have completed 10 years of operations and meet specific criteria laid down by the regulator are eligible to go public.
HDFC Life insurance meets the 10-year in existence clause. Deepak Parekh, Chairman of HDFC Life Insurance said that the company is planning to come up with an IPO for insurance and is likely to go public in the next two years.
A few days back, IRDA scrapped the clause under which life insurance companies were required to have minimum three year profitability record to float their IPOs. This has given a boost to the life insurers and will help HDFC Life as well.
HDFC Life, which is one of India’s leading private life insurance companies, is a joint venture between Housing Development Finance Corporation Limited (HDFC) and UK’s Standard Life plc. HDFC Ltd. holds 72.43% while Standard Life (Mauritius Holding) Ltd. holds 26% stakes in this joint venture.
Standard Life would need to increase its equity from 26% to 49%, so that a part of its shares can be offered to investors, he added.
Companies like ICICI Prudential and SBI Life Insurance are also one of earliest entrants in the private life insurance space in India. Earlier, this year, ICICI Prudential Life Insurance Company’s Managing Director – Sandeep Bakshi stated that the company is well capitalized and hence is not keen on going for an IPO.
HDFC Life Insurance Company has more than 500 branches in over 700 cities and towns. The company caters to the various needs of its customers, with a strong product portfolio comprising of 29 retail plans including Pension plans, Savings plans, Investment plans, Health plans and Protection plans. Its bancassurance partners are HDFC Bank, Saraswat Bank and Indian Bank.
