British insurer and asset manager Standard Life Aberdeen is raising Rs 3,557 crore ($510 million) by selling a 4.9% stake in its Indian joint venture HDFC Life Insurance Company Ltd.
The development comes after VCCircle first reported in February that Standard Life was in talks to offload more stake in the venture.
Standard Life has offered to sell at least 70 million shares and an additional 29.5 million shares as a greenshoe option. The sale opened for non-retail investors on Tuesday while retail investors will be allowed to bid on Wednesday.
The institutional quota accounts for 90% of the total issue size and received bids for 164 million shares. This is subscribed 1.83 times of the total issue and 2.6 times of the base issue, stock-exchange data show.
HDFC Life said the stake sale would help it increase its public float to 24.23%, which is a step closer to meeting the 25% minimum public shareholding required by the capital markets regulator.
Currently, HDFC Ltd holds a 51.5% stake in the insurer and Standard Life owns 29.2%; the rest 19.3% is public float.
Standard Life has set a floor price of Rs 357.5 for the share sale. HDFC Life's scrip closed at Rs 371.45 on Tuesday, down 4.71% in a positive Mumbai market.
Standard Life had earlier divested a 5.4% stake during the initial public offering of HDFC Life in late 2017.
Going by the listing agreement, Standard Life is required to hold at least 9% of its shares in HDFC Life until March 2021 owing to lock-in rules.