India’s first insurance IPO paves way for $50 billion industry


Singapore: India will get its first life-insurance listing since it opened up to private-sector investors 16 years ago, paving the way for more companies seeking to go public in an industry that’s since grown to more than $50 billion.

Housing Development Finance Corp., the nation’s largest mortgage lender, will offer as much as a 10% stake in its insurance venture with UK’s Standard Life Plc, HDFC said in a filing 19 April. The stake may be valued at about Rs2,000 crore ($302 million) based on the sale this month of a holding by HDFC to its foreign partner.

The listing marks a milestone after India’s Parliament cleared a hurdle when it voted last year to increase the amount foreign investors can own in the nation’s insurers to 49% from 26%, passing a bill stalled since 2008 because of disagreement among political parties. The insurance regulator also required life insurers to be operational for 10 years before they could sell shares.

While majority ownership and control in the joint ventures will remain with resident Indians, the bill allows overseas companies to expand their presence in the world’s second-most populous country. As many as seven companies may list their insurance units over the next few years, Prithvi Haldea, chairman of researcher Prime Database in New Delhi, said. The share offerings could range from Rs1,000 crore to Rs2,000 crore, Haldea estimates.

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