Standard Life revives Indian listing plan

Standard Life is back on the trail to list its Indian joint venture as the life insurance market recovers from a regulatory overhaul, and a flotation could come as soon as the second half of next year, according to bankers.

David Nish, chief executive, was upbeat about the Indian business as growth returns and in light of the high valuations put on Indian insurers by recent deals, he told the Financial Times. However, he ruled out an outright sale of HDFC Life, the UK group's joint venture, and declined to give a timeframe for a listing.

"I think we have a very valuable business there," said Mr Nish. "We have to look at monetising these investments we have made, but we very much look at India as a business and a market for the long term."

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Standard Life raised its stake in HDFC Life in 2008 to 26 per cent in a deal that valued the venture at about USD 360 million, and at that time said it intended to list 10 per cent of the venture in 2009.

This year Japan's Mitsui Sumitomo Insurance paid USD 535 million for a 26 per cent stake in India's Max New York Life, the limit for foreign company ownership. Nippon Life, Japan's biggest life assurer by assets, last year bought 26 per cent of India's Reliance Life for USD 680 million.

Indian life insurance sales have tumbled since regulators launched an overhaul of product rules in 2010. However, the market is still viewed as very promising because of the rapid growth of an emerging middle class and the lack of state welfare.

Nathan Parnaby, chief executive of international business at Standard Life, said the regulatory clouds had lifted. "We can now launch a product on our own assessment and get approval later, whereas previously we had to wait for approval, which could take up to nine months," he said.

As the Indian market improves, a number of foreign-backed joint ventures could revive plans to list that were scrapped in the face of the regulatory changes, and one banker familiar with HDFC Bank, Standard Life's Indian partner, said companies could go to market towards the end of next year. Other bankers reckon deals would be more likely to materialise in 2014.

HDFC Life has gained market share among private life insurers even as the market has shrunk, Standard Life said this week in a presentation to UK investors.

HDFC Life's premiums for individual policies grew 4 per cent over the past two years to Rs27bn (USD 490 million) while the top seven non-state insurers saw premiums shrink by 23 per cent to Rs127bn, according to the presentation. The top seven private groups include HDFC, the two ventures bought into by Japanese groups, and Prudential's joint venture in India with ICICI.

The venture is also ready to pay dividends to its parent companies, it added.

Standard Life is also working to build its international offshore wealth business through offices in Hong Kong that serve Japan and North Asia and a new office in Singapore to serve southeast Asia and India.