HDFC Life likely to float maiden public issue after June 2011

HDFC Life is likely to be the first private sector insurer to come out with initial public offer with the company saying that it will bring its maiden share sale offer after June 2011.

HDFC Life is the only company in the insurance sector to have completed 10 years in operation, the minimum condition for insurer to come out with IPO.

"We want to improve our margins to get better valuations when we go public. We expect our profitability to improve in the next six months and then come up with an IPO in second half of next year," HDFC Life MD and CEO Amitabh Chaudhry said.
    
The IPO guidelines of Sebi require a three-years track record of profit for a company to float a public issue.
    
HDFC Standard Life, which recently been rebranded as HDFC Life, completed 10 years of operations last month.
     
Chaudhry said the life insurance joint venture partner of HDFC, UK's Standard Life, is waiting for Parliament approval for amendment in Insurance Act to up its stake to 49 per cent from the 26 per cent at present.
    
The amendment Bill, which would allow foreign investment up to 49 per cent in Indian insurance companies, is pending in Parliament and is likely to be passed by next year. Current norms allow foreign investment up to 26 per cent in an insurance company.
    
"Standard Life is willing to increase stake in HDFC Life. Once the bill goes through, the UK partner can increase stake in the company so that we we can dilute our holding proportionately," he said.
    
The Securities and Exchange Board of India (Sebi) had last month approved public issues by insurance companies. "We are waiting for IPO guidelines by the insurance regulator Irda. When we have it we will study that," Chaudhry said.
    
Of the 22 private life insurers operating in the country, only HDFC Life is the only company to complete 10 years of operation.