Mumbai: Housing Development Finance Corporation (HDFC) on Friday said that it may come out with an initial public offering (IPO) for its insurance business in about two years. (Agencies)
"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.
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 per cent from the current 26 per cent, 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 per cent from 26 per cent 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.
Since March 2010, the central bank has upped its key rates ten times, with the latest being on June 16, when it hiked short-term lending and borrowing rates by 25 basis points each to 7.5 and 6.5 per cent, respectively.
Housing mortgage lender HDFC today reported a 22 per cent Y-o-Y growth in net profit to Rs 844.53 crore for the April-June quarter. HDFC had a profit of Rs 694.59 crore in the June quarter of 2010-11.
Parekh said the firm so far has not seen any slowness in demand, as there is a shortage of houses and people want to buy a house.
He further said the infrastructure and power was the two segments where there was some slowness and he attributed it to delays in approvals.
Mumbai: Housing Development Finance Corporation (HDFC) on Friday said that it may come out with an initial public offering (IPO) for its insurance business in about two years.