HDFC Life Insurance Company shares nosedived more than 3 per cent on the BSE after the company announced the acquisition of Exide Life Insurance, a wholly-owned subsidiary of Exide Industries, for Rs 6,687 crore. HDFC Life will acquire 100 per cent stake in Exide Life Insurance for Rs 6,687 crore, out of which Rs 725.97 crore will be paid in cash and the remaining amount through a share issue. As of 1:30 pm, HDFC Life shares were trading at Rs 735, lower by 3.14 per cent, on the BSE.
Mr Deepak S. Parekh, Chairman, HDFC Life said, "This is a landmark transaction, first of its kind, in the Indian life insurance space. It would enhance insurance penetration and further our purpose of providing financial protection to a wider customer base."
"HDFC Life will acquire 100 per cent stake in Exide Life Insurance from Exide Industries via issuance of 8,70,22,222 shares at an issue price of Rs 685 per share and a cash payout of Rs 726 crore, aggregating to Rs 6,687 crore," the company said in a statement to the stock exchanges.
The proposed deal will help accelerate the growth of HDFC Life's agency business and tap into Exide Life's strong presence in South Indian cities, HDFC Life added.
Exide Life Insurance had a total premium income of Rs 3,325 crore for financial year 2020-21 and as on June 30, 2021 it had assets under management amounting to Rs 18,78 crore.
The BSE Sensex and NSE Nifty were trading higher by 0.3 per cent a the time.
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