Exide to pump Rs 400 cr in FY11, committed to insurance biz

KOLKATA: The country's leading lead acid battery maker Exide Industries Ltd today said it would invest Rs 400 crore in the battery business and remain committed to the life insurance arm though it is losing money on it.

"We are investing Rs 400 crore during the current year to expand capacity of batteries. With this investment the capacity of batteries for four-wheelers will increase by 28 per cent and 70 per cent for two-wheelers," Exide Managing Director and CEO TV Ramanathan said on the sidelines of AGM.

The company would infuse Rs 80 crore in the Maharashtra facility, which is expected to be operational in August.

It is also planning to increase the use of recycled lead by acquiring greater capacity in smelting. This would help the company in improving margins.

"We want to increase recycled lead usage through smelting from 42 per cent to 70 per cent in the next 2-3 years," Ramanathan said.

The company is open to acquisitions in smelting capacity. Of its seven subsidiaries, two are smelting companies acquired in recent years.

When asked about his response on the investment in ING Vysya Life Insurance, Ramanathan said, "We are committed to the insurance business and are aware that it is a long term investment."

Exide's total investment in the insurance company stands at Rs 625.73 crore as on 2009-10, higher by Rs 94 crore over the previous year.

"As far as losing market share is concerned, ING is only concentrated in four states while marketshare is calculated nationwide," Ramanathan said.

Exide lost Rs 68 crore in 2009-10 fiscal. ING Life is operating in India since 2001. In 2005 Exide invested Rs 203 crore to acquire a 49.13 stake in ING Vysya Life Insurance.

Exide does not have any plan to change the name of the company to reflect its identity despite being the largest shareholder, he said.