Like its peer ICICI Bank, the Housing Development Finance Corporation is on a value unlock mode. After netting Rs 235 crore by selling a 26 per cent stake in its general insurance business to ERGO International, an arm of the Germany’s Munich Re, HDFC plans to list its mutual fund subsidiary later this year. The Economic Times reports, quoting HDFC chairman Deepak Parekh, that HDFC is looking at listing its mutual fund business later this year. What will also aid this move is the stockmarket’s rising interest in the mutual fund shares after UTI Asset Management decided to get itself listed.
Also, the mutual fund companies are getting valued higher these days; an indication being Reliance Capital Asset Management selling a 5 per cent stake to Eton Park recently for Rs 500 crore, valuing the company at Rs 10,000 crore. Reliance AMC was valued at 13 per cent of its assets under management, compared to the earlier multiples of 4-6 per cent of AUM.
As for selling the stake in general insurance arm, HDFC has got the approval from Insurance Regulatory Development Authority to part with 26 per cent stake for Rs 235 crore to ERGO International. HDFC had earlier parted ways with Chubb from the general insurance JV. The new JV will be now be renamed HDFC ERGO General Insurance Company, and will be headquartered in Mumbai.
Earlier, ICICI Bank had said that that it would list its investment bank ICICI Securities, life insurance arm ICICI Prudential, general insurance company ICICI Lombard, and the bank’s housing finance arm ICICI Home Finance. However, it plans to keep the mutual fund arm and private equity business ICICI Ventures private.

Posted on 01/29/08, 5:02 PM
in: Capital Markets, Deals, Mergers & Acquisitions
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