But Deepak Satwalekar, its CEO, is not from Scotland …
He has the HDFC culture. Deepak had grown up here in an atmosphere and environment of conservatism. We don’t worry about. We like it.
You plan to take the life insurance firm to market in 2009. Is it correct to say that IPO market will remain bad till that time?
We are not really concerned about the market conditions. We will raise a small amount and I believe that if you have a good track record, even in the worst phase of bear market you can raise money. We may raise Rs500- Rs1000 crore and that’s not difficult with out track record. We may get a little lower price but we always leave money on the table for the investors. That’s our philosophy.
What about your general insurance firm?
We have got new partner, new team and new CEO. We are very active in the market in the last two months and you need to give us one more year and we will become No 3. We had a couple of bad years and did not do anything. Chubb (Global Financial Services Corporation), wanted to buy us out but they could not find a partner and IRDA (Insurance Regulator Development Authority) did not give them permission. We lost one year this way and another year was lost fighting on valuation…
Will the government raise the ceiling on FDI in insurance to 49%?
It could work out. The government made this commitment many years ago and its credibility is at stake. The government was blaming the Left (Front, a former ally) for not being able to do this but now the Left parties are not there anymore, (so) we expect the government to go ahead.
What about your asset management business?
This will go to market before the life insurance company. We are now No. 2 in terms of assets under management but the most profitable AMC in India. We have a good track record and will get good value. We hope to do about 10% dilution in first phase and our stake will come down from 60% to 50% but it will maintain at that level.
Any plan to go for a holding company structure at HDFC group?
The biggest stumbling block for a holding company was dividend distribution tax at two levels. The government has removed the dual taxation in the Union Budget. Now a holding company concept can work.
We could look at the holding company concept. We have various options before us but first we want to take the AMC to the market in September-October next year and then the life insurance firm.
So, have you put the discussions on holding company on the back burner or are they fairly active?