Standard Life Mauritius Holdings, the joint venture partner in HDFC Life Insurance is planning to sell 4.93 per cent stake or 99.5 million shares in the life insurance company with a floor price of Rs 357.50 per equity share. This is likely to fetch Standard life close to Rs 3,557 crore.

The stake sale by Standard Life in HDFC Life comes shortly after a similar move by BNP Paribas Cardif, the joint venture partner in SBI Life Insurance, another listed private sector life insurer.

Earlier this month, BNP Paribas Cardif sold 9.2 per cent stake in SBI Life for Rs 4,751 crore. It was one of the largest insurance deals in the country since 2016, when the first insurance company got listed.

Standard Life has proposed to sell up to 70 million equity shares in the company representing 3.47 per cent stake to non-retail and retail investors on March 12 and March 13 respectively. Moreover, it has the option to additionally sell 29.5 million equity shares, representing 1.46 per cent stake in the company as an over-subscription option.

Currently, Standard Life holds 29.2 per cent stake in the life insurance company while HDFC, the majority stakeholder, has a 51.5 per cent stake. After the stake sale, Standard life’s shareholding in HDFC Life will come down to 24.27 per cent.

Standard Life has appointed DSP Merrill Lynch as the broker for the sale of equity stake.

All the listed private sector life insurance companies stocks have been under some cloud because of company-specific concerns. But, analysts are of the opinion that with profitability expected to rise, their earnings prospects look better.

Also, because of market volatility, the ULIP sales of the life insurance companies have taken a hit and companies are focusing more on pure protection business, which will boost their margins. The protection mix of SBI Life is 11 per cent on the value of new business, while that of HDFC Life and ICICI Prudential Life is 16.6 per cent and 8.63 per cent, respectively, on annual premium equivalent (APE).

In Q3 of FY19, HDFC Life posted profits to the tune of at Rs 245.63 crore, up 18.3 per cent. The company’s profit stood at Rs 207.32 crore in the same quarter of 2017. The net premium income of the company saw a 27.3 per cent rise in the third quarter of FY 19 from Rs 5419.9 crore in Q3 FY 18 to Rs 6897.7 crore in Q3 FY 19.

Protection Annualised Premium Equivalent (APE) of the life insurer has increased from Rs 407 crore in the first nine months of FY18 to Rs 673 crore in the first nine months of 9M FY19, up 66 per cent. Protection business of the insurer comprises 28.1 per cent of the total new business premium.

The new business premium, which is a combination of individual business premium and group business premium, reported a 41 per cent rise from Rs 7,065 crore in the first nine months of FY 18 to Rs 9,940 crore in the first nine months of FY 19.

HDFC Life was trading at Rs 389.80, down 0.51 per cent from previous days close on the BSE.