HDFC Standard Life — now renamed HDFC Life — is planning to go public sometime next year to become the first Indian insurance company to list on the stock exchanges.
The company, a joint venture between mortgage lender HDFC and UK’s Standard Life, is waiting for an enabling legal change expected before that.
Deepak Parekh, HDFC’s chairman, told reporters on Tuesday at an event to mark its rebranding that an insurance bill which would allow Indian companies to enhance foreign stakes from the current 26% to 49% is expected to be passed early next year.
The demand for higher access to overseas insurance firms is one of the key demands of the US and figured in talks during President Barack Obama’s visit to India this week.
“The bill is pending in the parliament and discussions are in process. I am quite hopeful that sometime early next year it will come through,” said Parekh .
He said he was clear on listing the firm that has completed 10 years.
“We are making preparations for an IPO but we can not go further unless the bill is passed by the parliament as foreign investors would be eligible to buy only if the cap is increased to 49%,” said Parekh.
Standard Life’s chairman, Gerry Grimstone, said the bill would aid the “modernization” of India’s insurance laws.
The Securities and Exchange Board of India recently gave its go-ahead to public issues by insurance companies.
Parekh said the Insurance Regulatory and Development Authority (IRDA) will also soon come out with the IPO guidelines for insurance companies.
Parekh also told reporters that over the next six months HDFC will infuse R50 crore in HDFC Standard Life. It also plans to infuse R100 crore into the insurance company in the next fiscal year.
As the insurance sector has witnessed a number of regulatory changes over the past few months, the HDFC Chairman expressed his concern over the pace of the change.
“The changes are good for the industry in the longer run and the only concern was that the introduction of these changes was little too fast and it takes a lot of management time to move from existing system to a new system,” Parekh said.