HDFC to sell 10% in HDFC Standard Life in IPO

HDFC Standard Life plans to sell up to 10 per cent equity held by Housing Development Finance Corporation Limited (HDFC) in the insurance joint venture, in an initial public offer, to raise around Rs2,000 crore.

In a regulatory filing with the stock exchanges, HDFC Standard Life said it has already started the IPO process and that the public offer could be launched by the end of the calendar year.

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.

While financial details of the IPO are yet to be worked out, the IPO could be worth at least about Rs2,000 crore, going by the valuation derived by the private insurer under its earlier off-market stake sale transactions.

HDFC had sold a 9-per cent stake in HDFC Life to JV partner Standard Life of the US for over Rs1,700 crore,

The fresh stake sale would make HDFC Standard Life the first life insurance company to initiate the IPO process.

In a regulatory filing, HDFC said the board of directors of its non-listed subsidiary, HDFC Standard Life Insurance Company Limited (HDFC Life), has approved taking steps to initiate the process for an IPO.

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.

On Tuesday, HDFC Standard Life reported a 4.2 per cent increase in net profit at Rs818 crore for the fiscal ended 31 March 2016.

The insurer had posted a net profit of Rs786 crore in the previous fiscal.

Total premium collection of the company rose 10 per cent to Rs16,313 crore, HDFC Life said in a statement. The company has paid a dividend of Rs216 crore to its shareholders.