HDFC Bank to pick around 10 pc stake in Go Digit Life Insurance

NEW DELHI: India's largest private sector lender HDFC Bank said it will acquire 9.94 per cent stake in Go Digit Life Insurance. Currently, Go Digit offers motor insurance, health insurance, travel insurance, property insurance, marine insurance, liability insurance, and other insurance products.

On Thursday, the private lender entered into an "indicative and non-binding term sheet" with Go Digit Life Insurance worth amount between Rs 49.9 crore to Rs 69.9 crore, in two tranches, by subscribing to equity shares of the Company, it said in a regulatory filing to the stock exhanges. This deal is, however, subject to execution of definitive agreements whose terms and conditions are to be mutually agreed upon, and fulfilment of other norms, it added.

"The Company proposes to carry out life insurance business in India, subject to grant of certificate of registration by Insurance Regulatory and Development Authority of India," the filing said. Recently, Go Digit General Insurance has recently filed its draft red herring prospectus (DRHP) for an initial public offering (IPO) that will include fresh issuance of equity shares and an offer-for-sale.

The Company proposes to utilize the IPO proceeds to augment its capital base and maintain solvency levels. "Our proposed deployment of the Net Proceeds has not been appraised and it is based on management estimates, current circumstances of our business and prevailing market conditions, which may be subject to change," the DRHP document stated.