HDFC Life, India’s largest private insurance company, is in talks to acquire Exide Life to expand its business and market dominance.
The project, which is seen as one of the most important business ventures in the Indian insurance market, is valued at around Rs 6,687 crore. HDFC Bank plans to expand its business on a large scale after the RBI lifted trade restrictions on the bank.
Exide Industries Branch Company
Exide Life is a subsidiary of Exide Industries, a leading manufacturer and seller of batteries in the Indian automobile industry. Wholesale sales of the insurance segment are seen as crucial as Exide Industries plans to manufacture batteries for electric vehicles.
Exide Life Company
As Exide Industries has decided to sell Exide Life in bulk, the deal has become the largest business in the Indian insurance market. HDFC Bank plans to sell a total of Rs 6,687 crore worth of Exide Life shares, based on the latest data.
Exide Industries Shares
Shares of Exide Industries have risen about 14 percent since the announcement. But HDFC Bank shares fell about 4 percent
6,687 crore deal
The final decision on the Exide Life and HDFC Life deals will be taken by the CEOs of the two companies at their respective executive meetings today. The deal seeks to acquire 100 per cent stake in HDFC Bank Exide Life Insurance, or about 87 million shares, at a value of Rs 726 each for about Rs 6,687 crore.
Companies Link
The merger will take place after the acquisition of the shares of the two companies and after the payment is made. Prior approval must be obtained from the Market Regulatory Authority.
Who benefits
Exide Life has a large business presence in South India, especially in 2nd and 3rd tier cities. This is the biggest profit for HDFC Bank. Since HDFC has fewer customers in this segment, it will make good profits by capturing Exide Life.
Bangalore Company
Headquartered in Bangalore, Exide Life is a very profitable company. The financial indicators of the company are very strong and have been running profitably for the last 9 financial years. The company has a Solvency Ratio of 200 percent.
Exide Life Company
Exide Life not only provides a lucrative life insurance service but also has a strong agent network. Not only this but it also has digital distribution opportunities.
HDFC Erco
HDFC Life, meanwhile, has been experiencing tremendous growth in its insurance services in recent times.
Life Insurance Corporation (LIC)
As the federal government plans to list Life Insurance Corporation (LIC) on the Mumbai Stock Exchange through an IPO, HDFC Life’s acquisition of Exide Life will not only dominate the private sector but also increase its value.
Does HDFC Life advantage from it?
YES Securities stated the inclusion of Exide Life could upload almost 40% to the provider base and approximately 35% to the provider base, a key strategic aim for HDFC Life. He factors out that there’s a enormous addition in phrases of geographic presence as Exide Life has a enormous presence in degree 2 and three facilities and withinside the south. The mixed entity ought to advantage extensively from post-merger synergies, he stated.