HDFC tanks 5 %, insurance merger faces IRDA's barrier
DSIJ Intelligence / 15 Nov 2016
In a development, which doesn’t bode well for Housing Development Finance Corporation, the insurance regulator IRDA (Insurance Regulatory Development Authority) has expressed concerns about the mega merger between HDFC Life and Max India.
In a development, which doesn’t bode well for Housing Development Finance Corporation, the insurance regulator IRDA (Insurance Regulatory Development Authority) has expressed concerns about the mega merger between HDFC Life and Max India.
An application was filed by Max Life Insurance Company and HDFC Life seeking the in-principle approval of IRDAI for the above-mentioned scheme on September 21, 2016.
The original scheme of amalgamation proposed merging of insurance business in an agreement between Max Financial Services (MFSL), its subsidiary Max Life Insurance Company Ltd.(MLIC), HDFC Life and Max India.
"IRDA has expressed reservations to accept the scheme of amalgamation in its current form. MLIC and HDFC Life believe that the scheme of arrangement as submitted to the IRDAI follows all applicable laws and propose to represent and clarify the matter to IRDAI," said the company in a separate exchange filing.
Reacting to this development plus demonetisation taking a toll on the stock HDFC plunged more than 5 per cent to hit an intra-day low of Rs 1201.
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