HDFC Life board approves IPO

With the fate of merger proposal with Max Life hanging in balance as the insurance regulator is yet to approve the deal, HDFC Life has decided to revive its plan for tapping the capital market as its board approved the initial public offering (IPO) proposal on Monday.

The insurer will now seek insurance regulator Insurance Regulatory and Development Authority’s (IRDAI) approval before filing the draft prospectus with the market regulator, Securities and Exchange Board of India (SEBI).

HDFC Life is a joint venture between mortgage financierHDFC Ltd and Standard Life. While both the partners will partially dilute their stake, the total equity dilution of the company will be upto 20%, HDFC said in a communication to the exchanges.

Last year, following its merger proposal with Max Life, HDFC Life had put its IPO proposal on the back burner. However, now that the merger proposal is stuck with IRDAI since the regulator wants the insurers to revise the structure of the deal, HDFC Life has revived its IPO proposal.

“We continue to believe that such a transaction (merger with Max Life), if it can obtain the necessary approvals,could create strategic value for both the companies..if Max Life and ourselves are able to obtain all the necessary regulatory approvals, HDFC Life Board and its promoter’s would be wiling to re-evaluate the option of a merger with Max Life in due course,” HDFC Life informed the exchanges.