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HDFC Life Looking To Raise Rs 2,500 Crore Through IPO Next Year

HDFC Life Looking To Raise Rs 2,500 Crore Through IPO Next Year
Last Updated: Oct 27, 2015 | 190 Views
HDFC Life, India’s second largest private life insurer by new business, has announced its decision to come out with an Initial Public Offering (IPO) early next year and is looking to raise over Rs. 6,000 crore by selling a 25 per cent stake. 

A Joint Venture (JV) between India’s HDFC and Scotland-based Standard Life, the IPO will be launched once Insurance Regulatory Development Authority of India (IRDAI) and Foreign Investment Promotion Board (FIPB) approves the stake hike of the foreign partner from 26 per cent to 35 per cent  in the insurance JV, which is valued at Rs. 1,700 crore. 

With the hike in stake, the share of both companies in the JV will stand at 35 per cent . Additionally, Standard Life has also agreed to give up its right to increase its stake to 49 per cent, the maximum stake that a foreign partner can have in a JV. 

This will be the first IPO from an insurer to be introduced in the Indian market since the government allowed private and foreign participation in 2000. Initially, the foreign partner was allowed to hold a maximum stake of 26 per cent but this was increased to 49 per cent on March 12 after the Rajya Sabha gave its nod to the bill proposing higher cap on FDI in insurance. 

HDFC Life has reported an increase of 8 per cent taking its profit after tax to Rs 790 crore, compared to that in the previous year. The company reported market consistent embedded value of Rs 8,810 crore as on March 31, up 26 per cent over that a year ago.

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