The housing finance major has entered into a share purchase agreement for sale of 44,12,000 equity shares, representing 0.62% of the issued and paid-up share capital of HDFC ERGO.
The stake sale is being done in accordance with the direction of the Reserve Bank of India requiring HDFC to reduce its shareholding in HDFC ERGO to 50% or below.
The total income of HDFC ERGO for the year ended 31 March 2021 was Rs 7,557.50 crore, which was 5.43% of the consolidated income of HDFC.
The networth of HDFC ERGO as at 31 March 2021 was Rs 3,253.55 crore which was 1.96% of the consolidated net worth of HDFC.
The stake sale agreement was signed on 8 May 2021 and the corporation expects to complete the stake sales by 12 May 2021.
The shares of HDFC ERGO are being purchased by ERGO International AG, foreign promoter of HDFC ERGO, at Rs 536 per share, aggregating to Rs 236,48,32,000.
"Subsequent to the above sale, HDFC ERGO would cease to be a subsidiary company of HDFC," the housing financier said in a statement.
HDFC ERGO General Insurance Company is a 51:49 joint venture between HDFC and ERGO International AG, the primary insurance entity of Munich Re Group. The company offers complete range of general insurance products ranging from motor, health, travel, home and personal accident in the retail space and customized products like property, marine and liability insurance in the corporate space.
HDFC is engaged in financing by way of loans for the purchase or construction of residential houses, commercial real estate and certain other purposes, in India.
The corporation reported 42.4% jump in standalone net profit to Rs 3,179.83 crore in Q4 FY21 as against Rs 2,232.53 crore in Q4 FY20.Total income declined by 2.3% year-on-year (YoY) to Rs 11,707.53 crore in the fourth quarter.
The scrip gained 2.12% to currently trade at Rs 2549.25 on the BSE.
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