HDFC Life buys Exide Life Insurance for ₹6,687 cr

NEW DELHI: HDFC Life Insurance Co. Ltd agreed to buy Exide Life Insurance Co. Ltd, a unit of battery maker Exide Industries Ltd, for ₹6,687 crore, allowing the country’s most valuable private insurer to bolster its presence in south India.

Of the total deal value, HDFC Life will pay ₹725.98 crore in cash and the rest by issuing 87 million shares at ₹685 apiece to Exide Industries, HDFC Life said in a regulatory filing.

The purchase will help HDFC Life deepen its presence in south India, especially smaller towns, complementing its market footprint, the firm said, adding that it will also provide access to a wider market.

The acquisition is expected to be completed by next June and is subject to regulatory and other approvals. The merger process of Exide Life into HDFC Life will be initiated upon completion of the acquisition, the insurer said.

Bengaluru-based Exide Life has a customer base of around 1.19 million and assets of over ₹18,781 crore as of June 30. Exide Life’s total premium income rose to ₹3,325 crore in the year to March 31 from ₹3,220 crore in the previous year.

The board of HDFC Life, Exide Industries and Exide Life Insurance Co. Ltd approved the transaction involving the sale of Exide Life Insurance to HDFC Life, the statement said. The deal is expected to “enhance insurance penetration and further our purpose of providing financial protection to wider customer base.”

The deal, which comes at a time state-owned Life Insurance Corp. of India is preparing to go public, may accelerate consolidation among the 24 life insurers in India. Earlier this year, India cleared a plan to raise foreign direct investment in insurance to 74% from 49% to help local insurers meet their growing capital requirements.

Housing Development and Finance Corp. owns 49.95% in HDFC Life, while its British joint venture partner Standard Life has been trimming its stake to help the insurer meet minimum public shareholding norms for listed companies.