India: HDFC Life files application for IPO with regulator

Photo: Pradeep Gaur/Mint

HDFC Life, a subsidiary of the country’s largest housing finance company HDFC Ltd, has filed an application with the Insurance Regulatory and Development Authority of India (IRDA) seeking approval for its planned initial public offering, two persons with direct knowledge of the development told Mint.

The company is expected to file a draft red herring prospectus (DRHP) with market regulator Securities and Exchange Board of India (Sebi) in August, the two persons said.

According to the people cited above, HDFC and Standard Life Plc are likely to dilute stake in the ratio of 3:1 through the IPO. Currently, HDFC owns 61.65% stake and Standard Life holds 35% in the life insurance company.

The development comes after HDFC Life earlier this week decided to go ahead with the IPO as the deadline for a merger with Max Life Insurance Co. Ltd was extended after IRDA rejected a previous structure for the same, citing violation of Section 35 of the Insurance Act. The board of directors of HDFC, on 17 July, approved an enabling resolution for an IPO.

Both HDFC as well as Standard Life (Mauritius Holdings 2006) will dilute their shareholding through an offer for sale of equity shares up to 20 % and raise anywhere between Rs8,000 crore and Rs10,000 crore. An HDFC Life spokesperson declined comment.

HDFC Life had hired investment banks for the IPO in May last year and had initially targeted the end of 2016 to hold its share sale but later put plans on hold as discussions with Max Life began for the merger which would have led to an automatic listing.

“We have kept the option for the proposed merger with Max Life open,” Amitabh Chaudhry, managing director and CEO, HDFC Life, told Mint earlier this week.

“We still feel there is a lot of synergy in the merger and will benefit both the companies. The IPO should happen before December,” Chaudhry added.

Mint had reported in June that HDFC Life had informally reached out to a few domestic and foreign investment banks for its IPO after IRDA earlier that month rejected the original three-step merger plan, citing legal violations.

Indian companies have raised a total of $10 billion in the first half of 2017 by selling equity and equity-linked securities, a 127.8% increase from a year ago, according to a report by Thomson Reuters. Financial services sector accounted for majority of activity with 52.8% market share and generated $5.3 billion in proceeds.

On 18 July, Mint reported that SBI Life Insurance Co. Ltd, the joint venture between SBI and BNP Paribas, filed the draft red herring prospectus for its IPO to raise more than $1 billion.

On 14 July, ICICI Lombard General Insurance Co. Ltd, the non-life insurance joint venture between ICICI Bank Ltd and Fairfax Financial Holdings Ltd, filed its draft red herring prospectus. The two shareholders plan to sell a combined 19% stake through the IPO.

Many other insurance companies, including state-owned ones, are queuing up to launch IPOs.

In April, Mint had reported that New India Assurance Co. Ltd and General Insurance Corp. of India Ltd (GIC) had hired investment banks to manage their IPOs as the government seeks to pare its stake in the state-run insurers.

Reliance General Insurance Ltd, the non-life insurance arm of Reliance Capital, is also planning to list, the company said last month.

Also Read:

India: HDFC Life may drop merger plans with Max, to push ahead with IPO

India: Insurers HDFC Life, Max prepare new merger structure after regulator’s rejection

This article was first published on LiveMint.com

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.