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Housing finance company Dewan Housing Finance Limited (DHFL) is not looking to raise any capital, post the deal with DLF to acquire its 74% stake in its life insurance joint venture DLF Pramerica Life Insurance.
Speaking to a CNBC TV18, Kapil Wadhawan, Chairman and Managing Director, DHFL said that the company is adequately capitalised and will not be coming into the market to raise capital, atleast for the next one year.
DHFL has signed an agreement to purchase realty major DLF's 74% stake in its life insurance JV for an undisclosed sum. The deal is subject to regulatory approval. Wadhawan told the television channel that they have already sought the approval of Insurance Regulatory and Development Authority (Irda) on the same.
He said that the existing shareholders had invested close to Rs 600 crore in the life insurance company and hence DHFL will not be required to contribute significant capital to the venture.
"With our strong distribution channel and loyal customer base and the existing capital base of the life insurance company, we will be able to ramp up the business very soon," he told the channel.
DLF Pramerica Life Insurance is a 74:26 joint venture with Prudential International Insurance Holdings Ltd ("PIIHL"), a subsidiary of Prudential Financial, Inc USA, and has been in operation for five years.
DLF said that the transaction consideration shall be disclosed post receipt of all such approvals. The life insurer's net loss widened to Rs 132.3 crore for the year ended March 2013, in comparison to Rs 128.2 crore for fiscal 2011-12.
The life insurer had seen a 27.4% drop in new business premium for the two-month period ended May and collected new premiums of Rs 15.21 crore. New business premiums of life insurance companies saw a 4.07% drop for the April and May period, as compared to the same period last year. However, for year ended March 2013, DLF Pramerica collected Rs 236.7 crore, compared to Rs 167 crore premium for 2011-12 financial year.
At 10.15 am, the DHFL scrip was trading at Rs 155.55, up by 1.37% compared to yesterday's close.
