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HDFC Bank on Thursday said it has entered into an indicative and non-binding term sheet with Go Digit Life Insurance, wherein the bank is looking to invest around Rs 120 crore in the company for a 9.94 per cent stake.
Go Digit Life has applied to the insurance regulator for a license to carry out life insurance business in the country and is awaiting certificate of registration by the Insurance Regulatory and Development Authority of India (Irdai).
Kamlesh Goyal-backed Go Digit is looking to bag a life insurance as well as reinsurance license from the regulator.
Recently, Go Digit General Insurance filed draft papers with the market regulator to raise around Rs 5,000 crore through an initial public offering (IPO) that will include fresh issuance of equity shares and an offer-for-sale.
Post the merger of HDFC Ltd into HDFC Bank, the bank will become the promoter of HDFC Life Insurance as well HDFC Ergo General Insurance.
As per Irdai regulations, a bank can’t promote more than one insurance company in the same segment. An entity holding over 10 per cent in an insurance company is categorised as a promoter while one holding below that limit is termed as an investor.
So, HDFC Bank’s investment in Go Digit Life is as an investor.
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