Prudential Financial, the foreign partner in DHFL Pramerica Life (DPLI) Insurance, which holds 49% in the joint venture, is seeking a new majority Indian shareholder for the company. Dewan Housing Finance Corporation (DHFL), which owns 51% in the life insurance company, plans to exit the business. In December last year, Pramerica Financial and DHFL had signed a binding term sheet for Pramerica to acquire DHFL’s stake in their joint venture asset management company. Wadhawan Global Company, the parent company of DHFL, had recently announced that they wanted to exit the DHFL Life Insurance business. There were media reports that both DHFL and Pramerica were looking to sell their stake in the life insurance JV.
James Weakley, senior vice-president, international businesses, Prudential Financial, said, “To be clear, we remain focused on maintaining the strength of the DPLI joint venture, on our long-term strategy for the Indian market, and on serving needs of our customers and employees. We are proud of the business that has been built by the local management team and confident in its future.” He added that working together with DHFL we will seek a new majority locally owned and controlled shareholder for DPLI to help facilitate monetisation of DHFL’s equity stake.
While DHFL may reduce or exit its equity stake in DPLI, Prudential Financial’s intention is to continue to play an active role in supporting the life insurance industry of India. Data from Irdai show that DHFL Pramerica Life Insurance received first year premiums at Rs 996.82 crore for the period of April to December, against Rs 1,000.14 crore in the previous financial year. On Sunday, CARE Ratings has put around Rs 1.2 lakh crore of the home financier’s bonds, deposits and loans raised from banks, mutual funds and insurers, among others, under ‘credit watch developing implications’.
Source: Financial Express