According to press reports HDFC Standard Life Insurance the country’s private sector life insurer is planning to dilute over 10% equity through an initial public offer (IPO).
HDFC Standard Life Insurance is a joint venture between HDFC and UK-based insurer-Standard Life, will utilize the proceeds of the company for capital requirements.
The public issue will make HDFC Standard Life the country’s first life insurance company to be listed on the Indian bourses.
Speaking on the sidelines of IIM-A Confluence, Deepak Satwalekar, managing director and CEO, HDFC Standard Life Insurance, confirmed that the company would be hitting the capital market very soon. Satwalekar said that the company was planning an IPO and its nitty gritty was yet to be sorted out.
Regarding the equity’s percentage to be diluted, Satwalekar said, “The Company would be diluting over 10 per cent of its holding in the insurance company.”
Standard Life has 18.1% stake in the JV. Recently Standard Life Insurance Company was listed on the London Stock Exchange. “We need to raise funds for our capital requirement for the life insurance business,” he said.
Currently, the insurance regulation allows an Indian insurance company to dilute only up to 26% to any foreign partners.
According to him, the life insurance business will need capital of around Rs 600 crore for the current year. He added that the IPO size would be above Rs 100 crore.
He informed “If the regulation allows further dilution of equity stake, we will go for dilution of equity above 10 per cent”.
Satwalekar said his company is confident that the regulation for equity dilution would be further increased to enable the insurance sector to raise more capital through equity dilution.