IRDA OKs HDFC stake sale to Munich Re arm

Written by Reuters | Mumbai, January 28: | Updated: Jan 28 2008, 18:42pm hrs
Housing Development Finance Corp said on Monday it had got 'in principle' approval for a previously agreed stake sale in its insurance arm to Munich Re subsidiary ERGO International.

The sale of 26 per cent in HDFC General Insurance Co Ltd, its non-life insurance unit, which was agreed to last October, is for Rs 2.35 billion, HDFC said in a statement.

The deal, approved by the Insurance Regulatory Development Authority, is likely to be completed this month, it said, and the venture will be named HDFC ERGO General Insurance Co Ltd.

"General insurance has been one area where we have lagged," Deepak Parekh, Chairman of HDFC, said.

"There are huge opportunities. We need to gear up and focus our energies to become one of the prominent players of this fast growing industry."

HDFC, India's top mortgage firm, last October said it would sell 32.5 million shares, or 26 per cent, the maximum permissible stake of foreign insurance ownership allowed under Indian law.

HDFC in 2007 bought its partner Chubb Corp's 26 per cent stake in their general insurance venture. It also has a life insurance venture with UK's Standard Life.