Mumbai bench of the National Company Law Tribunal on Friday gave a green light for the merger between insurance giant HDFC Life Insurance and Bangalore-based Exide Life insurance.
HDFC Life insurance company limited based in Mumbai, Maharashtra is one of the largest insurance companies in the country with more than twenty-nine billion dollars as assets.
The information regarding NCLT approval was communicated by HDFC Life insurance company limited in a regulatory filing to Insurance Regulatory and Development Authority. Insurance Regulatory and Development Authority is the regulator of insurance companies in India. The government agency is also responsible for implementing and enforcing rules and regulations related to insurance companies in the country.
HDFC Life insurance which is owned by Indian financial institution, HDFC and global investment company, Abrdn, announced in September last year that they will purchase a 100% stake in Exide Life. Shares of Exide Life were acquired by HDFC Life from its parent company, Exide Industries.
The acquisition deal was structured in such a way that HDFC Life will issue 8.7 crore shares at an issue price of Rs 685. The insurance giant will also give 726 crore rupees as cash to complete the merger deal. The entire merger deal between HDFC Life and Exide Life Insurance is expected to cost somewhere near 6700 crore rupees.
By the time the merger deal is closed Exide Industries will own a 4.1% stake in HDFC Life.
The merger deal got approval from the Competition Commission of India earlier this year.
HDFC Life insurance is a public company traded on both the Bombay stock exchange and national stock exchange since 2017. The insurance company is also part of the Nifty 50, the benchmark index of the National Stock Exchange.
Exide Life insurance which follows an agency-based business model has a strong presence in south India . With the merger of Exide Life insurance, HDFC Life is planning to enter into 2nd and 3rd-tier cities in south India.