HDFC Life completes Exide Life's acquisition, merger soon
Exide Industries now holds 4.1 per cent stake in HDFC Life. Effective today, Exide Life will operate as a wholly-owned subsidiary of HDFC Life
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HDFC Life Insurance Company Limited today announced the completion of the acquisition of Exide Life Insurance Company Limited after receiving all the necessary regulatory approvals. Effective today, Exide Life will operate as a wholly owned subsidiary of HDFC Life, the private insurance company said.
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"Pursuant to the agreement, there was a cash pay-out of Rs. 726 crore and 8,70,22,222 equity shares at an issue price of ₹685 per share were allotted to Exide Industries Limited (“Exide Industries")," said HDFC Life, which is a joint venture between HDFC Ltd and abrdn plc, in a stock exchange filing.
With this, Exide Industries now holds 4.1 per cent stake in HDFC Life. "The process for merger of Exide Life into HDFC Life will be initiated shortly," the statement added.
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The Competition Commission of India (CCI) in November had approved the acquisition by HDFC Life Insurance Company of 100% shareholding in Exide Life Insurance. The deal was inked for ₹6,687 crore, allowing the country’s most valuable private insurer to bolster its presence in south India.
As per HDFC Life, Exide Life’s agency-based distribution model, strong presence in South India and experience across tier 2 and tier 3 locations complements HDFC Life and will help expand its market and bolster its proprietary distribution.
Vibha Padalkar, MD & CEO, HDFC Life said it is first-of-its-kind acquisition and a reflection of its intent to build a stronger India by providing a financial safety-net to more people.
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"...life insurance market in India is multi-faceted, where one solution might not fit all. Different distribution channels and a varied product mix help cater to different customer cohorts across the diverse Indian geography, and this acquisition is an important milestone towards our strategic objective of bringing more people into the fold of financial protection," she added.
She said, "We would like to thank the out-going MD & CEO of Exide Life, Kshitij Jain for his stellar leadership in helping build a strong institution."
HDFC Life is a leading long-term life insurance solutions provider in India, offering a range of individual and group insurance solutions. As on September 30, 2021, it had 38 individual and 13 group products in its portfolio, along with 7 optional rider benefits.
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Also read: HDFC Life signs bancassurance deal with South Indian Bank
Exide Life Insurance Company Limited is 100% owned by Exide Industries Limited, and manages assets worth ₹18,381 crore (as on 31 March, 2021). It distributes its products through multiple channels viz. agency, bancassurance, corporate agency and broking, direct channel and online.
Bengaluru-based Exide Life has a customer base of around 1.19 million and assets of over ₹18,781 crore as of 30 June. Exide Life’s total premium income rose to ₹3,325 crore in the year to 31 March from ₹3,220 crore in the previous year.
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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.
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Updated: 01 Jan 2022, 09:11 PM IST