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Mumbai , July 25

HDFC Group wants to follow the investment strategy of its foreign partner - Standard Life, which bet on equities in the long term, Mr Deepak Parekh, Chairman, HDFC today said.

However, in India, investment in equities by life insurance companies is restricted by IRDA. Insurance companies can invest only up to 15 per cent of its corpus in `un-approved' securities.

HDFC Standard Life Insurance Company Ltd has just started investing in equities, Mr Parekh said.

Standard Life of UK, which has 18.4 per cent stake in HDFC Standard Life, invests up to 75 per cent of its funds in equities. According to Mr Iain Lumsden, Group Chief Executive, Standard Life Group, equities yield better returns if the investments are for a longer period, say more than ten years.

Mr Lumsden, who is in India to attend the board meeting of HDFC Standard Life, however, said that policyholder should be informed about the risk in investing in equities.

Talking to reporters here today, he said, for Standard Life group, after Germany and Hong Kong, India holds potential for growth. The potential in terms of number of policyholders could be more in India as compared with other countries. The group's business in the UK and Canada is suffering from lack of investor appetite, he said.

Responding to question on mergers and acquisition, he said there was not much scope for merger in insurance sector. ... . "at least we at Standard Life are not looking this possibility as we may not find someone with our model". Standard Life group manages 85 billion pounds globally.

Mr Parekh said capital HDFC Standard Life would be increased by Rs 70 crore to Rs 288 crore.

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