HDFC slips after agreeing to pare stake in insurance JV

HDFC lost 1.75% to Rs 1,277.10 at 12:25 IST on BSE after the company agreed to sell 9% stake in HDFC Standard Life Insurance Company to its joint venture partner Standard Life at Rs 95 per share.

The announcement was made after market hours on Friday, 14 August 2015.

Meanwhile, the S&P BSE Sensex was down 271.90 points or 0.97% at 27,795.41

On BSE, so far 5.92 lakh shares were traded in the counter as against average daily volume of 1.36 lakh shares in the past one quarter. Meanwhile, a bulk deal of 5.57 lakh shares was executed in the HDFC counter at Rs 1,289 per share at 09:24 IST on BSE.

The stock was volatile. The stock hit a high of Rs 1,306.40 and a low of Rs 1,272 so far during the day. The stock had hit a record high of Rs 1,399.80 on 4 March 2015. The stock had hit a 52-week low of Rs 975.25 on 16 October 2014.

The stock had underperformed the market over the past one month till 14 August 2015, falling 1.27% compared with a 0.48% rise for the Sensex. The scrip, however, outperformed the market in past one quarter, rising 7.57% as against Sensex's 3.17% rise.

The large-cap company has equity capital of Rs 315.28 crore. Face value per share is Rs 2.

HDFC has agreed to sell 17.95 crore equity shares of Rs 10 each of HDFC Standard Life Insurance Company (HDFC Life), constituting 9% of the issued and paid-up share capital of HDFC Life, to Standard Life (Mauritius Holdings) 2006 at Rs 95 per share. After the stake sale, HDFC's holding in HDFC Life will be 61.65% and that of Standard Life will increase to 35% from existing 26%.

Commenting on the transaction, Deepak Parekh, Chairman, HDFC said that the founding shareholders are also committed to obtaining a listing for HDFC Life. This will allow investors to participate in the growing Indian insurance sector, Parekh said.

HDFC Life is India's second largest private life insurance company by new business received premium, with a market share of 15.8% for the trailing 12 month period ended 31 March 2015.

HDFC's net profit rose 1.2% to Rs 1360.98 crore on 9.4% rise in total income to Rs 7068.28 crore in Q1 June 2015 over Q1 June 2014.

HDFC is India's first retail housing finance company and is currently one of the largest originators of housing loans in the country.

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