HDFC Life eyes stock currency for M&A deals after Rs 8,695 crore IPO
TNN|
Updated: Oct 30, 2017, 10.28 AM IST
MUMBAI: The public listing of HDFC Life will help the company to emerge as a consolidator in the insurance sector using stock as currency, HDFC chairman Deepak Parekh has said. India's oldest and most profitable private life insurer plans to raise Rs 8,695 crore in one of the biggest private insurance IPOs, which at the upper end of the price band would value the company at around Rs 58,000 crore.
HDFC and its partner Standard Life will together sell a 14.92% stake, encashing Rs 5,500 crore and Rs 3,100 crore respectively. The IPO coincides with HDFC LIfe's assets under management touching $1 trillion.
Earlier this year, SBI Life listed on the bourses raising Rs 8,400 crore, while ICCI Prudential Life Insurance mopped up Rs 6,057 crore through a listing last year. State insurer General Insurance Corp listed last week raising Rs 11,372 crore.
HDFC Life has set a price band of Rs 275-290 per share for the public issue that opens on November 7. The big insurance IPOs are setting valuation benchmarks apart from providing companies like HDFC Life stock currency to effect consolidation moves.
The public listing of HDFC Life will help the company to emerge as a consolidator in the insurance sector using stock as currency, HDFC chairman Deepak Parekh said. “Consolidation is bound to happen in the domestic insurance sector. The re are more than 50 life and non-life insurers.
Many of them struggling to collect Rs 20 crore in monthly premium to cover the expenses,“ Parekh said. Last year, HDFC Life and Max Life explored a merger deal which hit regulatory hurdles on structuring details. HDFC Life decided to file for a public offer.
Parekh declined to comment on specific merger possibilities, including reopening talks with Max Life. He said HDFC will retain 50.1% owners hip and Standard Life 24.9% after complying with the mandatory 25% listing norms over the next three years. "However, we are willing to re-look at ownership details if an attractive consolidation opportunity presents itself,“ he added.
Wipro chairman Azim Premji's family trust owns 18.95 million shares or 0.94% stake valued at as much as Rs 550 crore. Premji's family investment arm had bought stake about two years ago.
HDFC Life MD and chief executive Amitabh Chaudhry said the company made rapid progress on the digital front. “We have been disrupting ourselves rather than waiting to be disrupted," Chaudhry said.
HDFC and its partner Standard Life will together sell a 14.92% stake, encashing Rs 5,500 crore and Rs 3,100 crore respectively. The IPO coincides with HDFC LIfe's assets under management touching $1 trillion.
Earlier this year, SBI Life listed on the bourses raising Rs 8,400 crore, while ICCI Prudential Life Insurance mopped up Rs 6,057 crore through a listing last year. State insurer General Insurance Corp listed last week raising Rs 11,372 crore.
HDFC Life has set a price band of Rs 275-290 per share for the public issue that opens on November 7. The big insurance IPOs are setting valuation benchmarks apart from providing companies like HDFC Life stock currency to effect consolidation moves.
The public listing of HDFC Life will help the company to emerge as a consolidator in the insurance sector using stock as currency, HDFC chairman Deepak Parekh said. “Consolidation is bound to happen in the domestic insurance sector. The re are more than 50 life and non-life insurers.
Many of them struggling to collect Rs 20 crore in monthly premium to cover the expenses,“ Parekh said. Last year, HDFC Life and Max Life explored a merger deal which hit regulatory hurdles on structuring details. HDFC Life decided to file for a public offer.
Parekh declined to comment on specific merger possibilities, including reopening talks with Max Life. He said HDFC will retain 50.1% owners hip and Standard Life 24.9% after complying with the mandatory 25% listing norms over the next three years. "However, we are willing to re-look at ownership details if an attractive consolidation opportunity presents itself,“ he added.
Wipro chairman Azim Premji's family trust owns 18.95 million shares or 0.94% stake valued at as much as Rs 550 crore. Premji's family investment arm had bought stake about two years ago.
HDFC Life MD and chief executive Amitabh Chaudhry said the company made rapid progress on the digital front. “We have been disrupting ourselves rather than waiting to be disrupted," Chaudhry said.
(This article was originally published in The Times of India)
