RBI directs HDFC to reduce stake in HDFC Ergo, HDFC Life to 50% or below

Source : IANS
Author : IANS
Last Updated: Tue, May 19th, 2020, 09:02:25hrs
RBI directs HDFC to reduce stake in HDFC Ergo, HDFC Life to 50% or below

New Delhi: The Reserve Bank of India has directed HDFC Limited to bring down its stake in its subsidiaries HDFC Ergo and HDFC Life Insurance to 50 per cent or below.

The RBI has directed that post merger of HDFC Ergo Health Insurance Company Limited (formerly Apollo Munich Health Insurance Company) with HDFC Ergo General Insurance Company, subsidiaries of the corporation, the stake of the corporation in the merged entity should be brought down to 50 per cent or below within a period of six months from the merger.

HDFC said in a regulatory filing that it currently holds 51.15 per cent in HDFC Ergo Health and 50.48 per cent in HDFC Ergo, and based on the share exchange ratio, the corporation is entitled to 50.58 per cent stake in the merged entity, HDFC Ergo.

The merging entities have filed necessary petitions with National Company Law Tribunal (NCLT) , Mumbai and are awaiting approval of NCLT.

The RBI has also directed HDFC Limited to bring down its stake in HDFC Life Insurance Company, subsidiary of the corporation, to 50 per cent or below, from its existing shareholding of 51.43 per cent, on or before December 16, 2020.