NEW DELHI: HDFC Bank on Saturday said its board has given its endorsement to purchase over 3.55 crore shares in category company HDFC ERGO General Insurance Company for more than 1,906 crore in the parent firm Housing Development Finance Corporation (HDFC).
“The board of supervisors of HDFC Bank in its meeting held on June 18, 2021 declared the cost of 3,55,67,724 equity shares of Rs 10 each, representing 4.99 percent of their outstanding issued and also paid-up funding of HDFC ERGO General Insurance Company Ltd by HDFC Ltd,” HDFC Bank stated in the filing.
HDFC is the promoter and relevant party of the lender.
The cost is to occur in a cost based on an independent analysis report, subject to receipt of required approvals such as regulatory approvals and approval by the shareholders of the banking, ” it stated.
“The aggregate account for purchase 3,55,67,724 stocks of HDFC ERGO is 1,906.43 crore, i.e.
Rs 536 percent share,” it stated farther.
HDFC ERGO General Insurance needed a gross written premium of Rs 12,444 crore for the year ended March 2021.
The corporation’s net value stood at Rs 2,927 crore.
The personal sector general insurance is among the fastest growing businesses one of the peers using its gross premium growing in a 35 percent compounded annual growth rate (CAGR) over the previous 13 decades.
“The planned transaction enables the lender to take part in the development possibility of HDFC ERGO and fortify HDFC ERGO’s expansion prospects resulting in long-term value development by HDFC ERGO for its own shareholders,” it stated.
The lender was a supply partner of the insurance company as 2009.
The trade, should be shut by September this year, will need approval from insurance industry regulator Irdai and banking regulator RBI.
Any other necessary government or regulatory acceptance is going to be assessed before the share purchase agreement, HDFC Bank stated.