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HDFC Life drops 6% on stake sale announcement by Standard Life

At present, Standard Life holds 29.2 per cent stake in the life insurance company while HDFC, the majority stakeholder, has 51.5 per cent stake.

SI Reporter  |  New Delhi 

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Shares of Insurance dropped as much as 5.8 per cent to Rs 367.55 apiece on the (NSE) in the early trade on Tuesday after Mauritius Holdings, the joint venture partner in Insurance, said it was planning to sell 4.93 per cent stake, or 99.5 million shares, in the life insurance firm at a floor price of Rs 357.50 per equity share. This is supposed to fetch close to Rs 3,557 crore.

The stake sale by in comes shortly after the stake sale by BNP Paribas Cardif, the joint venture partner in SBI Life Insurance, another listed private sector life insurance company, said a Business Standard report. READ MORE

At present, Standard Life holds 29.2 per cent stake in the life insurance company while HDFC, the majority stakeholder, has 51.5 per cent stake. After the stake sale, Standard Life’s shareholding in HDFC Life will come down to 24.27 per cent.

According to reports, global brokerage firm JPMorgan has maintained 'neutral' stance on the stock with the target price of Rs 440. It said the stock looks pricey and product development is becoming less capital-light. The brokerage firm is concerned about potentially faster capital consumption outlook. "Not supportive of the company’s unique product mix," it said.

The stock has risen 13 per cent since its listing on the bourses on November 17, 2017. In comparison, the benchmark S&P BSE Sensex has gained 11 per cent during the same period.

First Published: Tue, March 12 2019. 09:54 IST
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