HDFC Financial institution on Thursday mentioned it has entered into an indicative and non-binding time period sheet with Go Digit Life Insurance coverage, whereby the financial institution is seeking to make investments round Rs 120 crore within the firm for a 9.94 per cent stake.
Go Digit Life has utilized to the insurance coverage regulator for a license to hold out life insurance coverage enterprise within the nation and is awaiting certificates of registration by the Insurance coverage Regulatory and Improvement Authority of India (Irdai).
Kamlesh Goyal-backed Go Digit is seeking to bag a life insurance coverage in addition to reinsurance license from the regulator.
Lately, Go Digit Common Insurance coverage filed draft papers with the market regulator to lift round Rs 5,000 crore by way of an preliminary public providing (IPO) that may embrace recent issuance of fairness shares and an offer-for-sale.
Submit the merger of HDFC Ltd into HDFC Financial institution, the financial institution will grow to be the promoter of HDFC Life Insurance coverage as effectively HDFC Ergo Common Insurance coverage.
As per Irdai laws, a financial institution can’t promote multiple insurance coverage firm in the identical section. An entity holding over 10 per cent in an insurance coverage firm is categorised as a promoter whereas one holding under that restrict is termed as an investor.
So, HDFC Financial institution’s funding in Go Digit Life is as an investor.