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ICICI Direct Report
Exide Industries Ltd.'s board of directors has approved the divestment of the company's life insurance business Exide Life Insurance Co. (100% stake). HDFC Life Insurance Co. is the purchaser.
The total consideration for the transaction is Rs 6,687 crore, proposed to be received via two routes-
Rs 726 crore via cash and
~Rs 5,961 crore worth of the purchaser's shares (~8.7 crore shares of Rs 685 each).
Exide Life reported revenue of Rs 4,937 crore in FY21, with net worth at Rs 1,481 crore.
Exide Industries' total investment in the divested entity is at ~Rs 1,680 crore.
Consequently, the transaction has taken place at attractive valuation of ~2.5 times embedded value, with the company's gains at ~Rs 5,007 crore.
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