India's HDFC Life to buy Exide's insurance business for $915 million
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BENGALURU - HDFC Life Insurance said on Friday it will buy the life insurance unit of battery maker Exide Industries for 66.87 billion rupees ($915.50 million), as it seeks to increase its customer base in a largely untapped market.
The deal will help HDFC Life, the country's largest private-sector insurer, strengthen its foothold in south India. India's life insurance penetration stood at 2.82% in 2019, according to the latest annual report from the country's insurance regulator.
The deal comes at a time the country is gearing up for the initial public offering of state-owned insurer Life Insurance Corp of India.
Exide Industries' shares surged 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 685 rupees per share and pay 7.26 billion rupees in cash, HDFC Life said in a regulatory filing https://www.bseindia.com/xml-data/corpfiling/AttachLive/6d39f86a-c233-4140-8aa2-3830fafa991a.pdf.
Exide Life had a customer base of 1.2 million and assets of more than 187.81 billion rupees, as of June 30.
The company, which had a total premium income of over 33.25 billion rupees for the financial year 2020-21, will be merged with HDFC Life once the deal closes.
Exide Industries, India's largest manufacturer of lead-acid storage batteries, has till date made a total investment of 16.8 billion rupees in its life insurance business.
"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 said.
($1 = 73.0420 Indian rupees)
(Reporting by Chris Thomas in Bengaluru; Editing by Shounak Dasgupta)
