Bengaluru: HDFC Life Insurance on Friday said it would buy the life insurance unit of the battery maker Exide Industries 6,687 crore ($915.50 million) as it seeks to grow its customer base in a largely untapped market.
The deal will help HDFC Life, the country’s largest private sector insurer, strengthen its hold in South India. According to the latest annual report of the country’s insurance regulator, India’s life insurance penetration stood at 2.82% in 2019.
The deal comes at a time when the country is gearing up for the initial public offering of state-run state-owned insurance company Life Insurance Corporation of India.
Shares of Exide Industries rose 10% after the deal and were set for their best week in 15 years, while HDFC Life fell as much as 4.2%.
As part of the deal, HDFC Life will issue 87 million shares to Exide Industries at Rs 685 per share and pay Rs 7,260 crore in cash, HDFC Life said in a regulatory filing.
Exide Life As of June 30, it had a subscriber base of 1.2 million and assets of over Rs 18,781 crore.
The company, which had a total premium income of over Rs 3,325 crore for the financial year 2020-21, will be merged with HDFC Life after the close of the deal.
Exide Industries, India’s largest lead-acid storage battery maker, has so far invested a total of Rs 1,680 crore in its life insurance business.
“This (deal) will enhance insurance penetration and further our objective of providing financial protection to a wider customer base,” said HDFC Life Chairman. Deepak Parekh said.
The deal will help HDFC Life, the country’s largest private sector insurer, strengthen its hold in South India. According to the latest annual report of the country’s insurance regulator, India’s life insurance penetration stood at 2.82% in 2019.
The deal comes at a time when the country is gearing up for the initial public offering of state-run state-owned insurance company Life Insurance Corporation of India.
Shares of Exide Industries rose 10% after the deal and were set for their best week in 15 years, while HDFC Life fell as much as 4.2%.
As part of the deal, HDFC Life will issue 87 million shares to Exide Industries at Rs 685 per share and pay Rs 7,260 crore in cash, HDFC Life said in a regulatory filing.
Exide Life As of June 30, it had a subscriber base of 1.2 million and assets of over Rs 18,781 crore.
The company, which had a total premium income of over Rs 3,325 crore for the financial year 2020-21, will be merged with HDFC Life after the close of the deal.
Exide Industries, India’s largest lead-acid storage battery maker, has so far invested a total of Rs 1,680 crore in its life insurance business.
“This (deal) will enhance insurance penetration and further our objective of providing financial protection to a wider customer base,” said HDFC Life Chairman. Deepak Parekh said.
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