HDFC will sell 9.57% stake in HDFC Life through an IPO in the coming months, becoming the third major life insurer to list on stock markets. The company has approved sale of 19,12,46,050 shares, it said in a notice to BSE on Friday night. British insurer Standard Life, which owns 35% in the insurance JV, is also expected to sell a portion of its shares.
The announcement follows last week’s decision by the HDFC Life board to sell up to 20% of its equity in a public offering. The move casts doubts over whether the HDFC Life and Max Life merger, which is yet to receive the regulator’s approval, will go through.
The two companies have a standstill agreement till July 31 which prevents HDFC Life from filing a draft prospectus with the Securities and Exchange Board of India. The insurer has, however, sought approval of the Insurance Regulatory Authority of India.
For some weeks, HDFC’s priority has been the IPO even as Max Life was confident of working out a new structure for the merger.
HDFC holds 61.52% of the issued and paid-up share capital of HDFC Life, Standard Life owns 35%, while the remaining is with employees and PremjiInvest. Size of the offer, price and other details will be determined in due course, the firm said.
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