Indian banking major HDFC has purchased a 0.7% stake in its insurance subsidiary, HDFC Life Insurance, as part of a bulk deal valued at Rs9.93bn ($121m).
The acquired stake represents 14.9 million shares of HDFC Life Insurance Company, reported Business Today with inputs from Press Trust of India.
HDFC bought the shares at an average price of Rs667.10 each.
The latest deal raises the housing finance company’s stake in HDFC Life Insurance to 49.35%. HDFC is required to purchase additional 14 million shares to own more than 50% of the life insurance company.
The deal comes shortly after HDFC received approval from the Competition Commission of India (CCI) to acquire an additional stake in two entities, HDFC Life Insurance Company and HDFC ERGO General Insurance Company.
The deal was also reached ahead of the merger between HDFC and its banking unit HDFC Bank.
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According to HDFC chairman Deepak Parekh, the proposed all-stock merger will be effective 1 July 2023.
Addressing the press, Parekh said: “Almost all the approvals are in place, and we hope to complete the merger process effective 1 July.
“The boards of HDFC and the bank are meeting separately on 30 June after office hours to clear and approve the merger, which will be effective 1 July.”
HDFC vice-chairman and CEO Keki Mistry revealed that following the completion of merger, the shares of HDFC Limited will stop trading from 13 July or 14 July.