HDFC Life shares dive 5% on Standard Life stake sale plan

Shares of HDFC Life Insurance Co. Ltd fell nearly 6 percent on Tuesday after the company said promoter Standard Life will sell up to 4.93 percent in the company through offer for sale. HDFC Life shares declined as much as 5.8 percent to Rs 367.55 per share in early trade on the NSE. The stock closed 5.12 percent lower at Rs 370.50 per share.

HDFC Life Insurance said on Monday that Standard Life (Mauritius Holdings) 2006 Ltd, one of the promoters of the insurer, will sell stake through OFS on March 12 and the floor price for the sale will be Rs 357.50 per share, HDFC Life said in a regulatory filing. At the floor price, the company will raise about Rs 3,500 crore.

Standard Life proposes to sell up to 7 crore shares representing 3.47 per cent with an option to additionally sell up to 2.95 crore shares representing 1.46 per cent of the total issued and paid-up capital, it said.

Currently, Standard Life holds 29.2 per cent stake in the life insurance company while mortgage firm HDFC has a 51.5 per cent stake. After the stake sale, Standard life's holding in insurance company will come down to 24.27 per cent.

Standard Life has appointed DSP Merrill Lynch as the broker for the sale of an equity stake.