The newspaper reports that the acquisition will be carried out via privately-held company. This will represent Nadar's first venture outside the IT business. He had set up HCL in 1976. The two listed IT companies of the group are HCL Technologies and HCL Infosystems. Their combined market capitalisation is approximately Rs 35,828 crore or in US dollar terms its will be $8 billion.
While spokespersons for both HCL and DLF declined comment to the media house.
A person with direct knowledge had apparently informed the Economic Times that HCL group will first acquire 4% stake in the insurance joint-venture. It will first buy fresh shares of the company and after sometime buy out DLF's residual 30% stake in the company. The entire process is subject to approval of the insurance regulator Irda.
Currently, DLF has 74% stake in the joint venture with Prudential International Insurance Holdings, the second-largest life insurer in the US, holds the rest i.e. 26%.
If HCL buys in the insurance business then DLF's share holding will fall to 30% after HCL's investment.
There could be a regulatory problem with this transaction. Current guidelines dictate that the original partner in a life insurance joint-venture cannot sell their stake in the company for the first ten years of operations.
Last month the biggest private company Reliance Industries said it was buying Bharti's stake in Bharti-AXA Life Insurance.
If the insurance regulator approves the sell-off, then it will definitely build a case for this transaction as well. "Given an option, DLF would like to sell its entire holding in shot," said the person involved in the transaction to Economic Times.