HDFC Standard Life Files Prospectus With SEBI For IPO:
HDFC Standard Life Insurance Company has filed a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for an initial public offering (IPO) of 299.83 million shares with a face value of Rs 10 each.
The IPO will be entirely comprised of an offer for sale by the company’s promoters Housing Development Finance Corporation and Standard Life. HDFC will sell 9.57 per cent holding in the insurance firm while its partner Standard Life will sell 5.43 per cent.
Of the total number of shares on offer, 2.14 million shares will be reserved for purchase by eligible HDFC Standard Life employees, 805,000 shares will be reserved for purchase by eligible HDFC employees and 29.98 million shares will be reserved for purchase by eligible HDFC shareholders.
Therefore, the net offer to the public will consist of around 266.90 million shares. The entire offer will constitute 14.97 percent of the post-offer paid-up capital of the company, while the net offer will constitute 13.33 percent.
The IPO will make HDFC Life the third major life insurer to list on the stock markets after ICICI Prudential Life and SBI Life.
HDFC holds 61.52 per cent of the issued and paid-up share capital of HDFC Life, Standard Life owns 35 per cent, while the remaining is with employees and PremjiInvest.
Standard Life had in 2015, bought 9 per cent in the life insurance business for Rs 1,700 crore, valuing the business at about Rs 19,000 crore. HDFC Life last reported embedded value of Rs 12,389 crore.
Given that ICICI Prudential Life is trading at about four times its embedded value, HDFC Life could attract a valuation of about Rs 50,000 crore. Last month, HDFC Life board had approved selling up to 20 per cent of its equity in a public offering. The insurer had earlier sought the approval of the insurance regulator IRDAI for the IPO.
Another private sector insurer, SBI Life, had already filed prospectus for an IPO.
HDFC Life is the third largest private life insurance company in the country. It has market share of 6.8 per cent.
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