Exide hits 52-week low on stake buy in ING Vysya Life
Batteries supplier Exide Industries touched a new 52-week low of Rs 121 on Thursday as it has agreed increase its stake in the insurance joint venture, ING Vysya to 100 percent.
January 24, 2013 / 13:01 IST
Batteries supplier Exide Industries touched a new 52-week low of Rs 121 on Thursday as it has agreed increase its stake in the insurance joint venture, ING Vysya to 100 percent.
Exide has decided to acquire the remaining 50 percent stake in ING Vysya Life Insurance for Rs 550 crore from its three partners including ING. Currently, the company holds 50 percent in its insurance subsidiary.It will buy 26 percent stake from ING, 16.32 percent from Hemendra Kothari Group and 7.68 percent from Enam Group. Post acquisition, Exide will bring new foreign player into the business to pump in fresh equity for expansion plans.Approval of the deal is expected within next two quarters and Exide can use ING brand for one year post approval.ING's exit from the Indian life insurance joint venture is part of the previously announced intent to exit Indian insurance sector as part of global restructuring strategy. Before exiting India, ING exited ventures in Malaysia, Hong Kong, Thailand. It also plans to exit China, Japan and Korea.Exide had first acquired stake in 2005; it has been invested Rs 750 crore for 50 percent in ING Vysya (IVL). IVL is a marginal player, which collected total premium of Rs 1,680 crore and asset under management of the company stands at Rs 6,260 crore as on March 2012.The research firm Barclays is overweight on the stock with a target price of Rs 171. The firm, however, feels the stake buy in ING Vyasa Life will result in significant reduction in the surplus cash and poses a risk to the profitability of the core battery business.At 11:39 hours IST, shares fell 1.12 percent to Rs 123.50 on Bombay Stock Exchange.(With inputs from CNBC-TV18)Also Read
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