Housing Development Finance Corp Ltd (HDFC), the country’s largest mortgage lender, is selling just under 1 per cent stake in its life insurance venture to a private investment arm of Wipro chief Azim Premji for around Rs 200 crore (approximately $31 million), as per a stock market disclosure.
HDFC has agreed to sell up to 18.9 million equity shares, comprising 0.95 per cent equity stake, in HDFC Standard Life Insurance Co Ltd (HDFC Life) to the Azim Premji Trust at a price of Rs 105 per share.
The company has already completed the sale of the first tranche of 11.9 million equity shares for Rs 125 crore, and the balance shares would be sold subsequently.
Once the entire sale of 18.9 million equity shares is completed, HDFC would own 71.42 per cent of the total issued and paid-up equity capital of HDFC Standard Life.
The deal values the life insurance venture at Rs 20,890 crore or around $3.3 billion.
Azim Premji’s private investment is managed through PremjiInvest and Azim Premji Trust is believed to be an investment entity under this family investment office.
PremjiInvest, with assets worth more than $2 billion under management, has been investing in high-growth listed and unlisted companies in India as well as growth-stage companies in China and the US with a focus on consumer, technology, financial services and healthcare.
Recently, it bought a bunch of apartments in a residential project called ‘Windmills of Your Mind’ located in Whitefield for Rs 60 crore ($9.6 million) from Bangalore-based developer Total Environment.
In September, it also participated in a $106 million Series C round of funding in California-based software firm Datastax Inc, which operates under the DataStax banner and manages databases, along with other investors.
Its other investments this year include Myntra, Future Lifestyle Fashions, Snapdeal, Amagi, Manipal Global Education and Financial Software & Systems.
HDFC Life is a joint venture between HDFC and Standard Life plc, the leading provider of financial services in the UK. The foreign partner holds 26 per cent stake which is the maximum as per existing FDII norms in the sector.
HDFC Life currently has 23 retail and eight group products in its portfolio, along with nine optional rider benefits catering to the savings, investment, protection and retirement needs of customers.
HDFC Life continues to have one of the widest reaches among new insurance companies with about 500 branches in India touching customers in over 900 cities and towns. The company has also established a liaison office in Dubai.
(Edited by Joby Puthuparampil Johnson)