Move to help HDFC Life’s reverse listing and pave the way for Standard Life to buy shares of HDFC
The insurance regulator has exempted listed insurance companies promoted by entities that are regulated by the Reserve Bank of India, Securities and Exchange Board of India or the National Housing Bank from rules on maintaining indirect foreign shareholding. The decision would help HDFC Standard Life Insurance’s reverse listing, and pave the way for part owner Standard Life to buy shares of partner HDFC.
Under the new rule, notification under the eighth amendment to the Insurance Act, Standard Life would be allowed to hold a stake in HDFC and HDFC Life and its investment in HDFC would not be treated as indirect investment in HDFC Life once the company got listed.
In June this year, HDFC Life entered into an agreement to merge with Max Life and then with Max Financial Services.
Since Max Financial Services is listed, this will lead to listing of HDFC Life’s shares on Indian exchanges.
HDFC Life was earlier preparing to go for an IPO by the yearend.
In the merged entity, the HDFC group will own about 65% while Max Group will have the remaining stake.
Earlier, the Insurance Regulatory and Development Authority had exempted insurance companies promoted by banks from maintaining indirect shareholdings.
ICICI Prudential Life is in the process of listing its shares and has filed a draft red herring prospectus with the Sebi.
Source: Economic Times
Date: 5th August 2016