Banks include JPMorgan, Morgan Stanley and Kotak Mahindra; law firm Cyril Amarchand Mangaldas appointed lawyer for the IPO
India’s largest mortgage lender HDFC Ltd has mandated investment bankers and one law firm to plan the initial public offering of its life insurance joint venture, two people familiar with the matter said.The mortgage lender will sell 10% from its 61.63% stake in the unit and is expected to raise around `3,000 crore from the share sale.
While JPMorgan Chase & Co, Morgan Stanley and Kotak Mahindra Bank Ltd are among the banks who have been mandated to plan the IPO, law firm Cyril Amarchand Mangaldas has been appointed as the lawyer for the primary issue, people who did not wish to be identified said.
HDFC Ltd did not respond to a mail sent on Wednesday morning seeking comment on the matter. Morgan Stanley and JP Morgan declined to comment.Kotak Mahindra Bank did not respond to ETs query. A representative for Cyril Amarchand Mangaldas said they would not like to comment on the matter.
In an interview with ET last week Keki Mistry, VC & CEO, HDFC Ltd had said, “We are in the process of identifying the bankers, a lot of bankers have worked with the insurance company over the last several years in anticipation of the IPO.“
Mistry had also said that he expected the IPO to hit the market in the latter part of 2016.
HDFC Standard Life’s board approved the IPO plans in a board meeting that took place on April 19. A statement sent to exchanges had said that the board of directors of HDFC Standard Life Insurance had approved taking steps to initiate the process for an initial public offer by way of offer for sale. HDFC Life, the nation’s second largest private insurer by premium income, is a joint venture b e t we e n H D F C a n d U K ‘s Standard Life. HDFC Ltd holds 61.63% stake in the company while Standard Life holds 35%.In December, Standard Life had bought a 9% stake in HDFC Standard Life to expand its stake to 35% for `1,705 crore,valuing the company at ` 19,000 crore. Earlier this year, sources with knowledge of the plans told ET that HDFC was looking for a nearly `25,000 crore valuation. India opened up the insurance sector to private investors in 2000, with a cap of 26% for overseas holding. In the same year, HDFC Life became the first private life insurance company to be granted a licence to operate in India.
In March last year, Parliament passed an amendment to insurance law to raise the overseas investment limit in local insurance companies from 26% to 49%.
In the year ended on March 31, 2016, HDFC Life’s gross premium income was `16,313 crore.
Source : Economic Times