HDFC sells 7.15% in life arm to UK ally

Housing Development Finance Corporation (HDFC) has sold 7.15 per cent of its stake in HDFC Standard Life Insurance Company to its joint venture partner, Standard Life (Mauritius Holdings), for Rs 200 crore.

Keki Mistry, vice-chairman and managing director of HDFC, said, "The equity shares of 7.15 per cent were sold for Rs 200 crore at a pre-agreed price. However, any future sale of shares by HDFC to Standard Life, if and when permitted by law, would be at a fair value."

HDFC Standard Life was establised by HDFC and Standard Life Assurance in 2000. The price for the 7.15 per cent stake was arrived at based on a formula agreed in 2006. After this sale, Standard Life Assurance holds 26 per cent of the equity capital of HDFCSLIC, the maximum that a foreign promoter can hold as per the FDI norms in the country's legislations.

The two promoters of the insurance company are planning to launch an IPO before the end of 2009. According to HDFC officials, HDFC Standard Life will be able to break even in next two years.

HDFC Standard Life is ranked fourth private life insurance company with a total premium income of Rs 2,856 crore in 2006-07 and market share of 9.2 per cent.

The company offers a range of individual and group insurance solutions. HDFCSLIC has over 12,000 employees and more than 1,00,000 financial consultants covering over 700 cities in India.