HDFC Standard Life Insurance is likely to hit the market with an initial public offering (IPO) in the first half of this fiscal (FY16), according to Keki Mistry, Vice-Chairman and Chief Executive Officer of HDFC Ltd. The company is targeting to raise ₹2,400 crore by offloading 10 per cent stake.

“Standard Life has the ability to increase its stake (in HDFC). We are in discussions to determine exactly how much it will go up to. Once that transaction is completed, we will file for an IPO,” Keki Mistry told BusinessLine .

“My sense is that it will happen in the first half of FY16. All key stakeholders, including Standard Life, HDFC and the HDFC Standard Life, want to go for an IPO,” he added.

HDFC owns about 72 per cent in the joint venture and the UK-based Standard Life has 26 per cent stake. The balance is held by other institutions.

According to earlier reports, Bank of America Merrill Lynch, JP Morgan, Morgan Stanley, Credit Suisse and JM Financial have been appointed to manage the IPO.

As for its non-life insurance subsidiary HDFC Ergo General Insurance, currently HDFC has no plans of listing it. “At this point, Ergo would probably want to look at increasing its stake to the level up to which it is permitted — which is 49 per cent. So, that process is still on,” he said.

HDFC Ergo is a 74:26 joint venture between HDFC and Ergo International AG, the primary insurance entity of Munich Re Group.

In March this year, Parliament had passed the Insurance Bill allowing foreign companies to hike their shareholdings in Indian insurance companies to 49 per cent from 26 per cent.

Several insurance players, including Bharti, Reliance, Max and State Bank of India, have said their overseas partners would raise their stakes in their respective joint ventures to 49 per cent.

Related Topics