India’s largest realty firm DLF will exit from life insurance business by selling 74 percent stake in its joint venture DLF Pramerica Life Insurance to Dewan Housing Finance, reportedly for over Rs 350 crore. DLF had in 2007 announced entry into the life insurance business through a joint venture with US insurance giant Prudential Financial’s arm. The joint venture, where the Indian realty firm held 74 percent in the joint venture and the rest was owned by Prudential International Insurance 26 per cent, had reported a combined loss of over Rs 250 crore during past two fiscals.
A man walks past a DLF billboard in Mumbai. Reuters “…the company today signed definitive agreements to sell its 74 percent stake in the life insurance joint venture DLF Pramerica Life Insurance…to Dewan Housing Finance and its group entities,” DLF said in a filing to BSE. Neither of the companies, however, disclosed the value of the deal but sources said it could be worth Rs 350-400 crore.
“These agreements are subject to regulatory approvals. The transaction consideration shall be disclosed post receipt of all such approvals,” it said. “This transaction is in line with our ongoing strategy to divest non-core businesses or assets. We have had a very cordial relationship with Prudential and wish them the best in their new partnership with DHFL,” DLF Group CFO Ashok Tyagi said in a statement. During 2012-13, the company had earned first premium income of Rs 138.64 crore, a 35 percent increase over Rs 102.83 crore in the previous fiscal. At the end of 2012-13, the joint venture completed about four-and-a-half years of operations and had 55 branches in India and a team of 5,487 individual agents.
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