HDFC Standard Life plans to hit capital market in 2011

Private sector insurer HDFC Standard Life Insurance, which aims to break even by March 2012, today said it is planning to come out with an initial public offer early next year.

"We are hoping to come out with an IPO in the early part of next year (2011)," said HDFC Standard Life Insurance Managing Director Amitabh Chaudhary.

But before it can come out with its IPO, Chaudhary said the company will have to wait for guidelines from the Insurance Regulatory and Development Authority. At the same time, disclosure norms and guidelines on embedded valuation are also expected to be issued by the government, he said.

These rules are expected to be out in the next 6-9 months, which would help in taking a view on the IPO, he said. In addition, there is anticipation that the government will take a view on raising the FDI ceiling in the insurance sector to 49 per cent from the current 26 per cent, which will open the field for more foreign investment.

HDFC Standard Life is a 74:26 joint venture between Housing Development Finance Corporation (HDFC) and UK-based Standard Life Insurance.

Asked about breaking even, Chaudhary said the company aims to become profitable in the next two years. As such, it should be profitable by 2011-12, he said.

On the capital infusion, he said the insurer had invested Rs 170 crore in 2009-10 and it should be between Rs 150-200 crore during the current fiscal.

The capital infusion would be for meeting the company's solvency margin and for business growth, he added.

The paid-up capital of the company stood at Rs 2,000 crore at the end of March, 2010.

HDFC Standard Life collected Rs 2,669 crore as its first year premium during the first 11 months of 2009-10, compared to Rs 2,234 crore during the corresponding period of the previous fiscal.