Standard Life Aberdeen slashes its stake in HDFC Life Insurance to 8.9%

Standard Life Aberdeen slashes its stake in HDFC Life Insurance to 8.9%
Written by:
Wajeeh Khan
December 3, 2020
  • Standard Life Aberdeen slashes its stake in HDFC Life Insurance to 8.9%.
  • The asset manager generated £172 million, selling 27.8 million shares of HDFC.
  • Standard Life Aberdeen can no longer nominate a director to HDFC’s board.

Standard Life Aberdeen plc (LON: SLA) revealed to have divested part of its stake in HDFC Life Insurance Company on Thursday. The asset manager generated £172 million of proceeds as it offloaded 2.8% of its stake in its subsidiary.

Standard Life Aberdeen opened less than 1% down on Thursday but gained more than 1.5% in the next few hours. The asset manager’s stock is now trading at £2.86 per share. In comparison, it had started the year at a per-share price of £3.36, and had tumbled to £1.74 per share in March. If you want to invest in the stock market, you’ll need a broker – here’s a comparison of the top few to make selection easier for you.

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Standard Life sells 27.8 million shares of HDFC on Thursday

The news comes only days after Standard Life had expressed plans of offloading Parmenion advisory arm. Earlier this year in June, Standard Life had generated £200 million, selling 40 million shares of HDFC Life Insurance.

Standard Life disposed 27.8 million shares of HDFC in total at a price of £6.24 each on the Bombay Stock Exchange and the National Stock Exchange of India. The money it raised as a result, the Edinburgh-based company said, will be directed at general corporate purposes.

In the past two years, Standard Life Aberdeen has slashed its stake in HDFC Life Insurance by roughly 19%. In December 2018, it had a 29.2% stake in its insurance subsidiary. Including Thursday’s announcement, the asset manager is now left with an 8.9% stake in the Mumbai-based company. At HDFC’s current per-share price of £6.52, Standard Life’s 8.9% stake in the insurance provider is valued at £1.17 billion.

Standard Life can no longer nominate a director to HDFC’s board

Since Standard Life now has a smaller than 10% stake in HDFC Life Insurance, it can no longer nominate one director to the Indian insurance provider’s board. The remaining stake that it has in HDFC Life insurance will remain unchanged until March-end 2021.

The UK asset manager said in the first week of August that it concluded the fiscal first half with a pre-tax loss of £498 million due to the Coronavirus pandemic that has so far infected more than 1.6 million people in the United Kingdom and caused over 59 thousand deaths.

Standard Life Aberdeen performed fairly upbeat in the stock market last year with an annual gain of close to 30%. At the time of writing, it is valued at £6.30 billion.