Mortgage Lender HDFC’s & Apollo Munich

Healthcare Insurance
By Kanishk Mohan BMS 2037

Introduction
Mortgage lender Housing Development Finance Corporation (HDFC) on Thursday said it
has completed the purchase of a majority stake in Apollo Munich Health Insurance for
Rs 1,495.81 crore. The company has acquired 51.16 per cent equity share capital of
Apollo Munich Health Insurance Company after receiving all requisite approvals from
competition commission of India (CCI), Reserve Bank of India and Insurance Regulatory
and Development Authority of India (IRDAI) by January 1.

Strength And Weakness

Strength of the Acquisition

HDFC has a large collaboration with corporate for employee salary accounts
- Acquisitions have boosted the operations of the bank

- HDFC bank has been responsible for several CSR activities and has also been
recognized with several banking awards

- It offers several services like online banking, app, mobile banking, NRI services etc

Weakness of Acquisition

- Rural penetration is low for HDFC as compared to nationalised banks

- Competition from public sector and private sector banks means limited market share
growth

- Competitors increasing their business can adversely effect HDFC's business

- New banking licenses and regulations can impact operations

- Foreign banks that offer complex products

Financial Structure
- HDFC bought 50.80 per cent stake of Apollo Hospitals

-Group in Apollo Munich for Rs 1,485.14 crore and 0.36 per cent shareholding of employees for Rs
10.6

-HDFC stock settled at Rs 1,270.80 on the BSE, up 1.09 per cent from the previous close.

-Mortgage lender HDFC on Thursday said it has completed the acquisition of majority stake
in Apollo Munich Health Insurance for ₹1,495.81 crore.
Synergy
-In order to win the trust of the masses, the company is offering a list of benefits for its customers. With HDFC ERGO
Health by your side, one can make cashless claims at 10,000+ network hospitals.

-There are no sub-limits on hospital room rents, hospital expenses, specific diseases and doctor fees. And yes, there’s Income
Tax benefits under sec 80(D) too.

-In fact, with HDFC ERGO Health, medical expenses for 586-day care procedures are covered along with pre-hospitalisation
expenses of up to 60 days and post-hospitalisation expenses of up to 180 days. HDFC ERGO also facilitates domiciliary
medical treatment.

Outlook
-HDFC ERGO is a 51:49 joint venture firm between HDFC and ERGO International AG, one of
the insurance entities of the Munich Re Group in Germany operating in the insurance field under
the BFSI sector.

-The company offers products in the retail, corporate and rural sectors.