UK’s Standard Life on Friday sold 5 crore shares or 2.5% stake in HDFC Life Insurance Company for Rs 2,200 crore through open market transactions. Shares were sold at Rs 441 per share, at about 8% discount to Thursday’s closing price of Rs 477.30.
Leading foreign institutional investors such as Capital Group Asset Management, Fidelity Investment, Key Square Capital Management and Norges Investment Management are among the buyers which picked up shares of the insurance firm, according to market sources.
The transaction was launched on the back of strong stock price performance amidst an extremely volatile environment; HDFC Life’s stock price gained 39.5% during the three days preceding the transaction, outperforming Nifty by 25.9%.
Shares of HDFC Life Insurance declined over 6% to Rs 440 in Friday’s trade. Standard Life is a joint venture partner in HDFC Life Insurance Company.
“This deal marks the re-opening of Indian equity capital markets and demonstrates that investors continue to be bullish on strong high quality India names,” said Kaku Nakhate, country bead, Bank of America. “Transaction was structured on the back of reverse inquiries from marquee investors, de-risking the transaction and we kept the deal structure fluid to retain full optionality, with an optimal base size,”
Bank of America Merrill Lynch was managing the share sale for Standard Life.
As on 31 December 2019, Standard Life (Mauritius Holdings) 2006 held 14.73% stake in HDFC Life Insurance Company while Housing Development Finance Corporation (HDFC) held 51.45%.
Last week, Standard Life Aberdeen suspended its international property fund following a wave of closures of UK-facing mandates, shutting its £550m ASI Global Real Estate fund.
Last year, Standard Life had pared its stake in HDFC Life through a number of transactions. In October end, Standard Life sold 4.96% HDFC Life Insurance Company to a clutch of institutional investors at Rs 575.15 apiece to mop up Rs 5,750 crore.
In August, Standard Life sold 3.2% HDFC Life via block deals. Prior to that, Standard Life had sold 1.78% stake for Rs 1,400 crore. In March, it had divested 4.93% stake in the life insurer to raise about Rs 3,600 crore.
Source: Economic Times