Exide Industries' shares surged 10 per cent after the deal.HDFC Life Insurance said on Friday it will buy the life insurance unit of battery maker Exide Industries for Rs 6,687 crore, as it seeks to increase its customer base in a largely untapped market.The deal will help HDFC Life, the country's largest private-sector insurer, strengthen its foothold in south India.

India's life insurance penetration stood at 2.82 per cent in 2019, according to the latest annual report from the country's insurance regulator.The deal comes at a time the country is gearing up for the initial public offering of state-owned insurer Life Insurance Corp of India.Exide Industries' shares surged 10 per cent after the deal and were set for their best week in 15 years, while HDFC Life fell as much as 4.2 per cent.As part of the deal, HDFC Life will issue 8.7 crore shares to Exide Industries at Rs 685 per share and pay Rs 726 crore in cash, HDFC Life said in a regulatory filing.Exide Life had a customer base of 12 lakh and assets of more than Rs 18,781 crore, as of June 30.The company, which had a total premium income of over Rs 3,325 crore for the financial year 2020-21, will be merged with HDFC Life once the deal closes.Exide Industries, the country's largest manufacturer of lead-acid storage batteries, has till date made a total investment of Rs 1,680 crore in its life insurance business."It (the deal) would enhance insurance penetration and further our purpose of providing financial protection to a wider customer base," HDFC Life Chairman Deepak Parekh said.