HCL is in talks with DLF Pramerica Life Insurance to acquire 51% stake, a move that will allow the latter to foray into the Indian insurance market.
DLF Pramerica Life Insurance is joint venture between DLF and Prudential International Insurance Holdings with 74% ownership held by DLF and 26% by Prudential.
A senior official with DLF told Business Standard that the firm will not exit the venture completely.
"We are in talks with HCL for selling a part of our stake," the official added.
The deal expected to be around INR5bn ($92.95m) was deferred a year back due to regulatory issues that required Indian promoters of insurance companies from divesting stake before completing 10 years in the business.
The Indian Finance Ministry, however, loosened the requirement late last year.
According to Business Standard, the negotiations are being lead by chief executive of HCL with KPMG serving as the adviser for the transaction.
The transaction, if completed, will bring DLF’s stake to 23%, while Prudential will continue to hold 26% and sale proceeds will be used to repay the company’s debts.
DLF Pramerica collected INR1bn ($19.1m) by writing new policies in 2011-12.