HDFC Life may Push IPO to Q3

HDFC Life’s mega initial public offering (IPO) is likely to get pushed to the third quarter (October-December) of the fiscal. The IPO is expected to be equivalent to a billion-dollar issue with HDFC selling a 9.57% stake and Standard Life offloading 5.43% in the company.

HDFC Life MD Amitabh Chaudhry said that currently both the regulators -Sebi and IRDAI -are going through the draft red herring prospectus. The regulators had raised queries and the insurer had responded to them. With the end of the second quarter around the corner, the company might have to update its results.

ICICI Prudential Life Insurance -the only listed life insurer -has a market capitalisation of Rs 60,000 crore. SBI Life, which will be selling its shares through an IPO later this month, has valued itself at Rs 70,000 crore at the upper end of the price band. HDFC Life is among the top insurers with assets under management of Rs 94,500 crore.

According to Chaudhry, institutional investors have developed a strong appreciation of the Asian insurance market on the back of their participation in the  region's insurance segment. " A large part of the valuation for European insurers like Prudential comes from the Asian market," said Chaudhry. He said that HDFC Life has invested in rival ICICI Prudential's shares. "We are a big investor and we will look at other opportunities as well. The only place we cannot invest are in our own shares," said Chaudhry.

Compared to other markets in Asia, Indian companies lagged in renewals of policies, which was improving and margins were way lower than Asian peers.