Thursday, 4 December 2014

RBL Bank plans to launch IPO in next three quarters

Premji eyes Rs 600 crore stake in HDFC Life

Tech czar Azim Premji is in talks to buy under 5% stake in HDFC Life for a little over $100 million, or Rs 600 crore. Premji Invest, the investment arm of the Wipro boss, is discussing acquisition of shares from HDFC in a secondary transaction, people directly familiar with the matter said. 

India's second largest private life insurance company is a joint venture with UK's Standard Life Plc, which holds the maximum permissible 26% stake. HDFC plans to divest a small part of its 72.37% stake in the life insurer as part of its regular fund raising plans, sources cited earlier added. 

Premji is buying into the potential high growth story of life insurers in a market with abysmally low penetration. India's life insurance penetration is estimated at 3.1% and that of insurance products in general at 3.9%. Notwithstanding short-term blips over regulatory revamp, the industry asset under management is expected rise at over 20% annually. 

An emailed query to Premji Invest chief investment officer Prakash Parthasarathy remained unanswered at the time of going to press, while HDFC could not be reached for immediate comments. 

HDFC Life became the country's first private sector insurance company when it was incorporated 14 years ago. It operates over 500 branches and has a multi channel network consisting of insurance agents, bancassurance partners, brokers and online platform selling its products and services. The company's AUM was pegged at Rs 50,000 crore in the last fiscal. 

The large M&A deals in the life insurance sector saw Japanese giants Nippon and Mitsui Sumitomo buying shares in Reliance Life and Max Life. 

Premji Invest manages assets worth more than $2 billion, investing into public and private equities and real estate. Premji, 69, is amongst India's richest with net worth estimated at $16 billion. The software tycoon has been cutting bigger, aggressive deals as revs up the consumption related investments in a recovering economy. 

Source : Economic Times.

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