HDFC Standard Life Insurance and Max Life Insurance Company Ltd are all set to merge with HDFC Standard Life Insurance Co and Deepak Parekh along with Analjit Singh explained the reasoning behind the deal that will create a behemoth with assets worth over Rs 1 lakh cr. Parekh said that the reasoning behind the deal was that ‘HDFC and Max have strong synergies.’ They were speaking at a CNBC TV 18 event.
HDFC in a statement had said “HDFC Life, Max Life and Max Financial Services approved entering into a confidentiality, exclusivity and standstill agreement to evaluate a potential combination through a merger of Max Life and Max Financial Services into HDFC Life by way of a scheme of arrangement.”
Here are the highlights of Parekh’s speech:
Favourable demographics provide a great opportunity for insurance companies, says Deepak Parekh
Expect new business premium to grow at 15% over the next 5 years: Parekh
Renewable premiums are set to grow approximately 10% per year going ahead: Parekh
Deal to form India’s largest private insurer: Parekh
Sumitomo and Standard Life have given go-ahead for merger: Parekh
Product mix of the combined entity will be well diversified: Parekh
Macro environment in India is very conducive: Parekh
Life insurance penetration is quite low in India: Parekh
Expect due diligence and valuable by next 60 days: Parekh
HDFC Life shareholders are keen to market the company: Parekh
Normal monsoon will be the trigger for the India market: Parekh
Merger will lead to eventual listing as Max is already listed: Parekh
Expect double digit growth from the merged entity: Parekh
It will take about 60 days for due diligence and valuations: Parekh
Analjit Singh statement:
Company has a solvency of 345%: Analjit
Valuation to come in 2 months: Analjit
The merger will be carried out through share-swap: Analjit