Jan 24, 2013, 01.55 PM | Source: Reuters
EXIDE-INDUSTRIES:Exide down on insurance diversification; Citi downgrades
Besides buying ING's 26 percent in ING Vysya, Exide said it would buy 24 percent from two other private Indian investors - Enam Group and Hemendra Kothari Group - for a total of about 5.5 billion rupees.
Citigroup downgrades Exide to "sell" from "buy" and cuts its target price to 118 rupees from 149 rupees on the news.
The bank says the acquisition of the insurance stake is "completely unrelated" to its core business and is also "loss-making", thus requiring additional incremental funding.
Citigroup adds Exide "is unlikely to find a purchaser" for the stake in the insurance unit.
(Reporting by Abhishek Vishnoi)