HDFC Life Insurance stated on Friday it can purchase the life insurance coverage unit of battery maker Exide Industries for Rs 6,687 crore, because it seeks to extend its buyer base in a largely untapped market.
The deal will assist HDFC Life, the nation’s largest private-sector insurer, strengthen its foothold in south India. India’s life insurance coverage penetration stood at 2.82 per cent in 2019, in response to the newest annual report from the nation’s insurance coverage regulator.
The deal comes at a time the nation is gearing up for the preliminary public providing of state-owned insurer Life Insurance Corp of India.
Exide Industries’ shares surged 10 per cent after the deal and have been set for his or her finest week in 15 years, whereas HDFC Life fell as a lot as 4.2 per cent.
As a part of the deal, HDFC Life will subject 8.7 crore shares to Exide Industries at Rs 685 per share and pay Rs 726 crore in money, HDFC Life stated in a regulatory submitting.
Exide Life had a buyer base of 12 lakh and property of greater than Rs 18,781 crore, as of June 30.
The firm, which had a complete premium earnings of over Rs 3,325 crore for the monetary 12 months 2020-21, shall be merged with HDFC Life as soon as the deal closes.
Exide Industries, the nation’s largest producer of lead-acid storage batteries, has until date made a complete funding of Rs 1,680 crore in its life insurance coverage enterprise.
“It (the deal) would enhance insurance penetration and further our purpose of providing financial protection to a wider customer base,” HDFC Life Chairman Deepak Parekh stated.