The board of directors of HDFC Life Insurance on Monday gave its approval to raise ₹2,000 crore through the issuance of non-convertible debentures in one or more tranches on a private placement basis over a period of 12 months.

“To strengthen our solvency position, we would be raising sub-debt up to ₹2,000 crore in one or more tranches over the next 12 months. This will help fuel our growth aspirations,” said Vibha Padalkar, MD and CEO, HDFC Life, at the quarterly earnings call.

The life insurance company has reported a net profit of ₹478 crore during the quarter ended June 30, up 15 per cent from ₹415 crore in the corresponding previous period.

Total premium during the quarter was ₹12,811 crore, up 10 per cent from ₹11,673 crore in the year-ago period.

“We have started the year on a strong note, achieving 31 per cent year-on-year growth in individual APE (annual premium equivalent), which implies a two-year CAGR of 21 per cent. This robust growth is driven by a comprehensive performance across all metrics,” said Padalkar.

However, the new business margin of the life insurer during the quarter was at 25 per cent, down from 26.2 per cent in the corresponding period of the previous year.

“The margin compression is primarily due to product mix and continued investment in infrastructure, manpower and technology,” Padalkar said.

Within the product mix, Ulips accounted for 38 per cent, non-par savings 35 per cent, participating products 16 per cent, term 6 per cent and annuities 5 per cent, based on individual APE, the insurer said in a statement.

“While we began the year with a high Ulip mix, we have been successful in lowering it during the quarter. We anticipate this moderation to continue in the coming months driven primarily by product launches across other categories,” said Padalkar.