Mortgage lender HDFC Ltd has approved sale of over 19 crore shares, or 9.57 per cent stake, in its subsidiary HDFC Life, through its proposed IPO.
Earlier this month, HDFC had decided to go solo for the initial public offering, dropping the initial merger plan with Max Group, after having faced regulatory hurdle because of the structure of the deal.
"The Corporation (HDFC) has approved offering of up to 19,12,46,050 equity shares of HDFC Life, a material non-listed subsidiary of the Corporation, representing 9.57 per cent of the paid-up and issued equity share capital of HDFC Life as on current data, for sale in the IPO," HDFC said in a regulatory filing.
On July 17, the board of HDFC Standard Life (HDFC Life) had passed a resolution approving the IPO by way of offering a combined 20 per cent holding, of which the UK-based JV partner wants to offload more than 10 per cent.
The insurance company is a joint venture between HDFC Ltd (61.52 per cent) and UK's Standard Life (35 per cent).
HDFC said the size of the offer, price and other details will be determined in due course.
"Post the said sale, HDFC Life would continue to be a subsidiary of the Corporation," HDFC said.
For 2016-17, HDFC Life logged a gross premium income of Rs 19,445 crore. Profit after tax for the year stood at Rs 892 crore while total income was Rs 22,189 crore.
Net worth of HDFC Life stood at Rs 3,839 crore as on March 31, 2017.