The Standard Life Plc logo sits on their head office building in Edinburgh, U.K. (Photographer: Matthew Lloyd/Bloomberg)

Standard Life To Sell 3.47% Stake In HDFC Life Via Offer-For-Sale

Standard Life Aberdeen Plc’s Mauritius arm plans to sell a 3.47 percent stake in HDFC Life Insurance Company Ltd. to meet the market regulator’s public shareholding norms.

The Scotland-based investment firm will sell 7 crore shares at Rs 357.50 apiece—a discount of 8.3 percent compared with the current market price—through an offer for sale from March 12-13.

“The move is in line with the normal course of business to meet SEBI’s (Securities and Exchange Board of India) public shareholding norms that require the insurer to allot at least 25 percent of its post-scheme paid-up share capital to public shareholders,” said Vibha Padalkar, chief executive officer at HDFC Life. “Since the promoter, HDFC Ltd., had made it clear that it did not wish to reduce its stake beyond 51.48 percent, the other promoter had to do so to meet the SEBI norms.”

This will bring down Standard Life’s stake in the life insurer to 24.3 percent from 29.93 percent, according to the company’s shareholding pattern filed with stock exchanges as of December 2018. The public shareholding in the company will jump to 24.19 percent after the stake sale.

The offer for sale will be open to non-retail investors on the first day and for retail investors on the following day. If fully subscribed, Standard Life (Mauritius Holdings) 2006 Ltd. would raise Rs 2,502 crore.

The offer for sale, however, can be extended to sell an additional 2.95 crore shares or 1.46 percent stake in case of over-subscription. If that option is triggered, Standard Life could raise up to Rs 3,557 crore.

DSP Merrill Lynch Ltd. will act as broker on behalf of the seller to manage the offer.