Standard Life, the UK-based investment manager, on Wednesday sold shares worth Rs 3,225.49 crore ($452 million at current exchange rates) in HDFC Life Insurance Company Ltd.
The British company sold 67.1 million shares at a price of Rs 480.7 apiece, the stock-exchange data shows.
HDFC Life’s shares recovered most of their intraday losses to close at Rs 516.70 apiece on the BSE on Wednesday, down 0.46% from the previous close.
The stake sale on Wednesday is Standard Life’s fourth liquidity event in the nearly two years. In May, Standard Life raised about Rs 1,404 crore ($202 million then) by selling a 1.78% stake in HDFC Life. In March, the company sold 4.9% shares in HDFC Life in March for Rs 3,557 crore ($510 million).
Standard Life has been trimming its stake to help the Indian insurer meet the minimum public shareholding norms of the Securities and Exchange Board of India for listed companies. Promoter holding in HDFC Life will drop from 76.14% to 74.36% after the sale, below the 75% cap.
After the sale transaction on Wednesday, Standard Life’s stake will reduce to roughly 19.7% from 23.02% at the end of June 2019-quarter
Capital Group, a Los Angeles-based financial services company, picked up a small chunk of shares for Rs 68 crore. Names of other buyers were not publicly available.
HDFC Life is currently the largest insurance company by market capitalisation. It is valued at Rs 1.04 lakh crore.
In November 2017, the private life insurer made a spectacular debut after its shares gained 19% on listing day and bucked the trend of Indian insurance companies making weak trading debuts.
The positive start followed an IPO that was subscribed nearly five times. In the IPO, HDFC sold 9.55% stake, while Standard Life will divested 5.42% stake.
The IPO was set in motion after the company’s plans for a merger with billionaire Analjit Singh-promoted Max Financial Services Ltd hit a regulatory hurdle.
Though the IPO was part of HDFC Life’s initial plans, it had subsequently considered a merger that would have resulted in the creation of India’s largest private sector life insurer with an annual premium worth Rs 25,500 core, surpassing that of ICICI Prudential Life Insurance.
After the Insurance Regulatory and Development Authority had turned down the merger proposal, both companies had said that they would file a revised merger structure, but it did not materialise.
