HDFC Life chief sees encouraging response from anchor investors

Our Bureau New Delhi | Updated on January 09, 2018 Published on November 01, 2017

CEO says company is open to acquisitions; IPO opens on Nov 7 and closes on Nov 9

HDFC Standard Life Insurance Company (HDFC Life), which is hitting the capital market next week, has seen interest from reputed funds, including a global investor who hitherto has never invested in the Indian IPO market or any Indian insurance IPO. Funds have expressed interest under the anchor book portion, said Amitabh Chaudhry, Managing Director & CEO, HDFC Life, but without revealing the name of the institutional investor.

Chaudhry also said that insurance is a long-term business and retail investors would do well to have a long-term investment horizon for good returns.

HDFC Life’s total IPO offering constitutes 14.92 per cent of the paid-up capital and is expected to net about ₹7,500-8,000 crore to the promoter selling shareholders. As it is an offer-for-sale by promoter selling shareholders — HDFC and Standard Life (Mauritius Holdings) 2006 Ltd — the private life insurer will not get any funds out of this IPO.

He also said that there has been a superlative response from institutional investors for the company’s anchor book portion which now stands almost closed. Chaudhry, however, declined to elaborate, stating that the details of anchor book investors will be released next week just before the opening of the issue.

No need for fresh capital

Chaudhry said HDFC Life is already well capitalised and is not looking to raise fresh capital for business growth this fiscal.

The IPO price band has been fixed at ₹275-290 a share. The minimum bid lot has been fixed at 50 equity shares and further shares can be subscribed in multiples of 50.

HDFC Standard Life Insurance Company is open to acquisitions and is not looking to drop its inorganic growth strategy even after its proposed public float, he said.

This would be the strategic approach of the company, whose proposed initial public offering opens on November 7 and closes on November 9.

“This IPO does a number of things for us. It will give us the currency to go and make a number of acquisitions in future,” Chaudhry said here on Wednesday.

With 24 players in the Indian life insurance industry and many operating at sub-optimal levels, Chaudhry expects several companies to emerge as takeover candidates for HDFC Life in the coming days.

Chaudhury also said that HDFC Life is not averse to once again pursue an M&A transaction with Max Life Insurance, if the latter were to sort out the structural issues that came in the way of regulatory approval recently.

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Published on November 01, 2017
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