HDFC plans to go public as soon as possible
09 Jul 2011
Housing Development Finance Corporation, the country's biggest private mortgage lender, is likely to go public in the next two years, chairman Deepak Parekh told shareholders today.
"We are planning to come up with an IPO for insurance in two years," Parekh added at the annual general meeting in Mumbai.
Parekh said the new Insurance Regulatory and Development Authority (IRDA) guidelines that allow life insurers to float an IPO without a three-year profitability clause would help, but added that HDFC would need to discuss it with its partner Standard Life.
He said Standard Life would have to increase its stake to 49 per cent from the current 26 per cent, so that part of its shares (the increased stake) can be offered to the investors.
The IRDA is planning to allow the foreign investors to increase their stake to 49 per cent from the current 26 per cent.
In a recent move, IRDA had allowed insurance companies to go public only if they have been operation for 10 years or more. For a long time, companies like ICICI Prudential, SBI Life and HDFC Life Insurance have been waiting for a go-ahead for an IPO under the new IRDA norms.
On interest rates, Parekh expects the Reserve Bank of India to raise its key rates by 50 basis points (0.5 per cent) this fiscal.
"I think in this fiscal it (the rates) will go up by 50 basis points maximum. It will be two doses of 25 basis points each till March 2012," Parekh told reporters on the sidelines of the AGM.