Becoming the first life insurer in the country to initiate IPO process, HDFC Standard Life today announced plans to launch its Initial Public Offer wherein parent HDFC Ltd would sell 10 per cent stake.
While the financial details of the IPO are yet to be worked out, the IPO could be worth at least about Rs 2,000 crore, going by the valuation derived by the private insurer under its earlier off-market stake sale transactions.
In a regulatory filing, Housing Development Finance Corporation Limited (HDFC) said the Board of Directors of its non-listed subsidiary, HDFC Standard Life Insurance Company Limited (HDFC Life), have approved taking steps to initiate the process for an IPO.
The IPO would be by way of an offer for sale by HDFC Ltd of up to 10 per cent of its stake in the insurance company.
In a separate filing, HDFC said it has “in-principle agreed to sell up to 10 per cent stake held in HDFC Standard Life Insurance Company Limited”.
HDFC Life said that the IPO is subject to various regulatory approvals including by insurance regulator IRDAI and markets regulator Sebi.
Yesterday, it had reported a 4.2 per cent rise in net profit at Rs 818 crore for the fiscal ended March 31, 2016.
The insurer had posted a net profit of Rs 786 crore in the previous fiscal.
Total premium collection of the company rose 10 per cent to Rs 16,313 crore, HDFC Life said in a statement.
The company has paid a dividend of Rs 216 crore to its shareholders.
HDFC recently completed sale of its 9 per cent additional stake in HDFC Lfe to foreign partner Standard Life, which has raised its stake from 26 per cent to 35 per cent.
The foreign insurer has paid Rs 1,705 crore for this 9 per cent stake, valuing the company at Rs 18,951.4 crore.
HDFC currently holds 61.65 per cent in HDFC Life.
In 2000, HDFC and Standard Life launched a joint venture, HDFC Life, which was the first private life insurance company to be granted a licence to operate in India.
Now, it has become the first life insurer to launch IPO process formally although a number of other players have expressed their intention to go IPO way and get listed.
The IPO is likely to take place this fiscal itself, while the markets regulator Sebi would be approached soon for filing of draft public offer documents.