HDFC Life IPO likely in mid-2016

Mortgage lender HDFC today said it is likely to go for public listing of its life insurance subsidiary in mid-2016 once its joint venture partner Standard Life hikes stake to 35 per cent.
In August, the leading housing finance provider had announced that Standard Life will increase its stake in the JV, HDFC Life, to 35 per cent from 26 per cent, currently.
"They (Standard Life) will buy 9 per cent of shares from us. For that 9 per cent the application has been made to FIPB recently, and also IRDAI (the regulator) has come out with some changes that are required in the shareholders' agreement, which is currently being worked on," HDFC Vice-Chairman and CEO Keki Mistry told reporters here.

"My sense is once this transaction is complete, we will look at an initial public offering (IPO). Therefore, an IPO will not happen in 2015 for sure, but somewhere in the middle of 2016," he said.
In order to bring in more clarity on the issue of compliance with the manner of Indian-owned-and controlled companies, insurance regulator IRDAI recently issued guidelines on FDI in insurance firms.
"Total foreign investment -- both direct and indirect holding in an Indian insurance company -- shall not exceed 49 per cent," it had said.

IRDAI clarified that the law will be applicable in case the companies proposes to hike their foreign investment from the existing level or even when they do not intend to increase their current foreign stake from the existing level.

On the issue of management control as specified in the new Insurance Act, the insurance regulator recently clarified Indian promoters will have control over appointment of majority of directors and that of key management persons, including CEOs.
However, key management persons, excluding CEO, may be nominated by the foreign investor provided such appointments are approved by the Board of Directors, where majority of them, excluding independent directors, are the nominees of Indian promoter, the guidelines said.