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"We are in the process to get new partner (for ING Vysya Life Insurance Company) . Yes, you can say, we have decided on this. But we are not going to sell our stake. The new partner may infuse more money...Anyway we need fresh capital for further expansion of the business" Exide Industries Managing Director and Chief Executive Officer P K Kataky said..
According to Kataky, investment in insurance is made with a long-term view. "We see in India a lot of people are not covered under insurance, particularly in rural areas. We very strongly feel there is a very big scope for insurance and that is the basic thought process, for which we have invested so heavily in the insurance business," he said on the sidelines of the company's annual general meeting here.
Earlier in the year, Exide had bought out three other partners holding 50% stake in ING Vysya Life Insurance Co Ltd (IVL) for Rs 550 crore. Following this ING Vysya Life Insurance has now become a wholly-owned subsidiary of Exide. Soon after the acquisition, Exide had indicated it would like to get an expert foreign partner and dilute its stake. The speculation, however, was that Exide's promoters, the Rajan Raheja group, would sell some of its stake.
However, FDI cap of 26% in insurance business, has kept Exide guessing. "Nobody knows what the government is going to do with FDI in insurance. As things stand now, we are obviously going to have the controlling stake in the insurance business," Kataky said.
A K Mukherjee, chief financial officer of Exide, suggested it would like to rope in a partner over the next one year. Also, according to Mukherjee, improved financial performance of ING Vysya Life Insurance would help it to get a better valuation. During 2012-13, ING Vysya Life Insurance recorded a decent profit of Rs 23.07 crore against a loss of Rs 31.15 crore in the previous fiscal.
Battery business:
India's largest automotive battery manufacturer, Exide Industries, which has already hiked prices twice in the current fiscal on account of rising lead prices and rupee depreciation, today said it may consider further hike if the Rupee weakens beyond Rs 61 per USD.
"There was about a 5% hike each time in April and earlier in this month. Although the lead prices has somewhat softened rupee depriciation has made it difficut. If rupee breaches Rs 61 level, we will have to again consider a price hike," Exide Industries Managing Director and Chief Executive Officer P K Kataky said
Earlier in the month with about 5% hike in prices, Exide has offset the impact of higher import cost of lead, the key input in batteries.
Meanwhile, the company earmarked Rs 280 crore capex for the current fiscal, of which Rs 70 crore would be spent for the capacity expansion. "This is part of our last year's capacity expansion plan. We are not looking no fresh capacity expansion again as automobile market is going through a slowdown," he said. The company, currently, utilising about 75% of its total capacity.
