IRDAI issued a statement declaring that bonds and debentures held by insurers in HDFC Ltd as of the date of the merger announcement, April 4, 2022, will maintain their status as investments in the "Housing and Infrastructure" category until the maturity of the respective bonds.
In addition, the IRDAI has provided an exemption allowing insurers not to comply with the single investee equity exposure norms for individual segregated funds at the Scheme Identification Number (SIN) level pertaining to HDFC Bank Ltd shares post-merger. This exemption will be in effect until June 30, 2024. However, the exemption will only apply to the holdings of the respective insurers as of June 30, 2023. Shares sold after this date will be reduced to the extent of the sale of shares thereafter, the regulator added.
This ruling follows the recent merger between HDFC Ltd and HDFC Bank Ltd, after which insurance companies sought permission from IRDAI to continue to classify their investments in HDFC Ltd bonds under the "Housing and Infrastructure" sector.