HDFC Standard Life Insurance, the country's private sector life insurer, is planning to dilute over 10 per cent equity through an initial public offer.
The public issue will make HDFC Standard Life the country's first life insurance company to be listed on the Indian bourses.
Speaking on the sidelines of IIM-A Confluence, Deepak Satwalekar, managing director and CEO, HDFC Standard Life Insurance, confirmed that the company would be hitting the capital market very soon. Satwalekar said that the company was planning an IPO and its nitty gritty was yet to be sorted out.
Commenting on the percentage of equity that would be diluted, Satwalekar said, "The company would be diluting over 10 per cent of its holding in the insurance company."
HDFC Standard Life Insurance is a joint venture between HDFC and UK-based insurer Standard Life, which has an 18.1 per cent stake in the JV.
Standard Life Insurance Company was recently listed on the London Stock Exchange. "We need to raise funds for our capital requirement for the life insurance business," he said.
According to him, the life insurance business will need capital of around Rs 600 crore (Rs 6 billion) for the current year. He added that the IPO size would be above Rs 100 crore (Rs 1 billion).
"If the regulation allows further dilution of equity stake, we will go for dilution of equity above 10 per cent", he clarified.
Currently, the insurance regulation allows an Indian insurance company to dilute only up to 26 per cent to any foreign partners.
Satwalekar said his company was hopeful that the regulation for equity dilution would be further increased to enable the insurance sector to raise more capital through equity dilution.
