India’s largest real estate player by market capitalisation DLF Ltd has completed sale of its 74 per cent stake sale in DLF Pramerica Life Insurance Company Ltd -- its life insurance joint venture with Prudential International Inc – to Dewan Finance Corporation Ltd and its group entities. The stake sale in DLF Pramerica was announced in July this year.
“Post completion of all the conditions precedent including regulatory approvals, DLF completed the sale of its 74% stake in the insurance joint venture with Prudential Financial, Inc. of USA to Dewan Housing Finance Corporation (DHFL) and its group entities,” DLF said in a disclosure to the Bombay Stock Exchange.
While Mumbai-based Dewan Housing Finance, the third-largest housing finance firm in the country, will pick 50 per cent, promoter group entities will buy 24 per cent.
The JV will soon be renamed to DHFL Pramerica Life Insurance Company Ltd, subject to regulatory approval.
“DHFL is thrilled to begin this new life insurance partnership with PFI. Together, we can help broaden the company’s ability to meet the life insurance needs of consumers across India. We are committed to working with PFI and the team at the joint venture company to grow the business, which we believe will generate long-term value for DHFL shareholders,” Kapil Wadhawan, chairman and managing director, DHFL, said in the statement.
DLF Pramerica Life Insurance, in which the US-based financial services company Prudential Financial Inc's subsidiary Prudential International Insurance Holdings Ltd holds the remaining stake, started operations in September 2008.
On March 31, 2013, the joint venture completed about 4.5 years of operations, had five branches in India and a team of 5,487 individual agents. Also, it issued 1,02,418 insurance policies in FY13, against 69,926 in the previous year.
DLF ventured into unrelated business domains, including insurance and hospitality, a few years ago but a debt pile-up on its balance sheet has forced it to unwind from such businesses and focus on core real estate development. The deal is as part of DLF’s efforts to divest its non-core assets to pare down debt.
On Tuesday, Kishore Biyani-led Future Group had offloaded 22.5 percent equity stake in its life insurance joint venture with Italy's Generali Group to Industrial Investment Trust Ltd in for about Rs 280-300 crore.