Standard Life sells nearly 5% stake in HDFC Life Insurance for over $800 mn
Photo Credit: VCCircle

Standard Life Plc, the UK-based investment manager, on Wednesday sold shares worth Rs 5,751 crore ($810 million at current exchange rates) in HDFC Life Insurance Company Ltd.

The company sold 100 million shares, or a 4.95% stake, at Rs 575.15 apiece, stock-exchange data shows.

HDFC Life’s shares ended at Rs 632.45 apiece on the BSE on Wednesday, up 3.62% from the previous close.

The stake sale in HDFC Life is Standard Life’s fifth liquidity event in nearly two years.

Standard Life had sold shares worth about $452 million in August, a 1.78% stake for around $202 million in May and a 4.9% holding for $510 million in March.

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. The norms require listed companies to ensure that at least 25% of their shares are held by public shareholders and no more than 75% by the promoters.

After Wednesday’s sale, the promoter holding in HDFC Life will drop to 69.4% from 71.16% at the end of September.

Standard Life held a 34.86% stake in HDFC Life before the company went public in 2017. After the transaction on Wednesday, its stake will reduce to roughly 14.7% from 19.69% at the end of September.

Capital Group, a Los Angeles-based financial services company, is among those that acquired the stake. Other buyers include New World Fund and Euro Pacific Growth Fund.

HDFC Life is India’s largest insurance company by market capitalisation. It is valued at Rs 1.27 trillion. The insurer had made a spectacular trading debut in November 2017, with its shares gaining 19% on the listing day.

The positive start followed an IPO that was subscribed nearly five times. In the IPO, HDFC sold a 9.55% stake while Standard Life divested a 5.42% stake.

As per the listing agreement, Standard Life is required to hold at least 9% stake in HDFC Life until March 2021 owing to share lock-in rules.

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