The deal has valued SBI Life at Rs 46,000 crore, higher than its rival ICICI Prudential.Google Flickr

HDFC Standard Life is soon expected to appoint banks for its Rs. 3,325 crore ($500 million) initial public offering (IPO), reported Reuters on Thursday. HDFC Life may hire Citigroup Inc, JPMorgan Chase & Co, Morgan Stanley and Kotak Mahindra Bank Ltd as banks for the planned IPO.

The life insurance company's share sale will be in the second half of the year, said International Financial Review (IFR), a Thomson Reuters publication. It noted that the firm was India's third-largest private-sector life insurer.

India, which has a life-insurance industry worth Rs. 3.32 lakh crore ($50 billion), has witnessed a range of joint ventures between Indian and overseas firms after opening up this industry to private players 16 years ago, Bloomberg reported. HDFC Life too is one such combined entity between India's HDFC and the UK's Standard Life.

ICICI Prudential Life, a joint venture between India's biggest private-sector lender ICICI Bank and the UK's Prudential Plc, is also preparing for an IPO, as reported by Bloomberg. This, it added, will heat up the race to seeking investors.

In a statement on April 20, HDFC Life's board approved plans for its IPO. It said the Mumbai-based mortgage lender HDFC will divest as much as 10 percent stake, while its Edinburgh-based partner will hold on to its recently upgraded stake of 35 percent.

A bill passed in 2015 in Indian Parliament allowed foreign insurance companies to raise stake up to 49 percent in an Indian insurance company from 26 percent. Since then, at least Rs. 9,100 crore has been pumped in as FDI in the country, said Bloomberg Intelligence.

HDFC Life's valuation was calculated at about Rs. 20,950 crore based on its recent 0.95 percent stake sale to PremjiInvest, a fund set up by Indian billionaire Azim Premji.