DLF plans to reduce stake in insurance JV; to sell upto 44% stake
India???s largest real estate firm DLF is likely to bring in a strategic Indian investor in DLF Pramerica Life Insurance, its insurance joint venture (JV) with US-based Prudential International Holdings.
The company is currently negotiating with a leading non-banking finance company to sell part of its 74% holding in its JV. It is expected to sell around 44% of its stake to the investor, who will thus become its single-largest shareholder. The rest 30% would be kept by DLF, while Prudential’s stake would remain at 26%, the maximum a foreign firm can hold under current laws. Meanwhile, the deal is expected to be completed over the next two months.
DLF had ventured into insurance in 2007 when the realty boom was at its peak. Currently, the JV has a paid-up capital of Rs 250 crore. Of this, DLF has invested Rs 185 crore and balance Rs 65 crore is invested by Prudential. Although the negotiation has not reached the valuation stage, officials stated that the deal is likely to happen at marginal premium to the face value.
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