The move follows the decision of Indian government to allow foreign firms raise stake in Indian insurance joint venture up to 49% stake.
Two people familiar with the development told The Economic Times that the UK-based company will acquire nearly 7% stake in the JV by investing INR12.5bn ($199.53m) – INR14bn ($223.48m).
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The stake acquisition will conclude before HDFC Life lists its shares, which internal discussions suggest would be at a valuation of INR180bn ($2.87bn)- INR200bn ($3.19bn) .
While Parliament has yet to approve the Insurance Amendment Bill, many private insurance firms have already started activities around raising FDI.
During an earlier interaction, HDFC Life chief financial officer Vinha Padalkar had said: "As per the agreement, Standard Life can increase its stake in the company at a fair value.
"Since we are (among) the first insurance companies to have received licence, it is natural progression to list the company, but it is the promoters’ call."
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By GlobalDataEstablished in 2000, HDFC Life reported a net profit of INR4.5bn ($71.83m) during the first half of the current financial year.
