Exide Industries - 100% stake in insurance JV to strain core ops - Edelweiss

Exide has decided to increase its stake in the insurance JV, ING Vysya Life Insurance (IVL) to 100%. It will pay INR5.5bn for the remaining 50% stake in the JV which it will acquire from three partners including ING. While the deal value is attractive at 1x estimated embedded value as against 1.5-2x valuation range for peers, the exit of ING / partners will lay the onus of supporting and running the business till such time a strategic partner is roped in. This can drag down the company's performance in the near term.

Maintain 'HOLD' with target price of INR132.

Source : Equity Bulls

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