HDFC plans IPO for insurance business in two years

“We are planning to come up with an IPO for insurance in two years,” HDFC chairman Deepak Parekh said

Housing Development Finance Corporation (HDFC) said that it may come out with an initial public offering (IPO) for its insurance business in about two years.

"We are planning to come up with an IPO for insurance in two years," HDFC chairman Deepak Parekh said at the annual general meeting (AGM) of the company.

Mr Parekh said the new Insurance Regulatory and Development Authority (IRDA) guidelines that allow life insurers to float an IPO without three year profitability clause would help but said the firm would need to discuss about it with its partner Standard Life.

He said Standard Life would have to increase its stake to 49% from the current 26%, so that part of its shares (the increased stake) can be offered to the investors.

IRDA is planning to allow the foreign investor to increase stake to 49% from 26% at present.

About interest rates, Parekh expects the Reserve Bank of India to raise its key rates by 50 basis points this fiscal.

"I think in this fiscal it (the rates) will go up by 50 basis points maximum. It will be two doses of 25 basis points each till March 2012," Parekh told reporters on the sidelines of HDFC's annual general meeting.

On Monday, HDFC ended 0.63% down at Rs707.50 on the Bombay Stock Exchange, while the benchmark Sensex declined 0.72% to 18,721.39.

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