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Last Updated : Feb 20, 2020 05:10 PM IST | Source: Moneycontrol.com

Max Financial Services climbs 15% on reports of Axis Bank's plan to buy 20% stake

The country's fourth-largest private sector lender owns a little over 2 percent of Max Life Insurance.

 
 
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Shares of Max Financial Services climbed 15 percent intraday on February 20 after a media report indicating that Axis Bank could be buying 20 percent stake in the company.

The stock touched a fresh 52-week high of Rs 597.60, rising 22 percent in the last 15 days. It was quoting at Rs 588.70, up Rs 72.25, or 13.99 percent, on the BSE at 1012 hours.

"Axis Bank is set to acquire more than 20 percent stake in Max Life Insurance through fresh issue of equity," The Economic Times quoted multiple sources said.

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The proposed deal is aimed at building a strategic and long-term relationship with Axis Bank, which contributes more than 54 cent to Max Life's revenue, the report said.

Axis Bank is expected to infuse more than Rs 2,000 crore in the insurer, it added.

The country's fourth-largest private sector lender in terms of market capitalisation owns a little over 2 percent of Max Life Insurance.

In addition, CNBC-TV18 reported that Max Financial Services and Max Life Insurance have called a joint board meeting on February 20 to discuss stake sale of chairman Analjit Singh in a group company.

Sources told the business channel that the boards of the two companies are likely to discuss a proposal under which Axis Bank is expected acquire a part stake belonging to Singh in Max Financial Services.

Singh owns 28.31 percent stake in Max Financial Services and 71.54 percent of his holding in the company is pledged.

Axis Bank's move to acquire stake from Singh will help the Max Group chairman to deleverage his pledged position. The move will also help Axis Bank get an indirect entry into the life insurance space through Max Life Insurance, a subsidiary of Max Financial Services.

As a result, other Max group stocks were also on buyers' radar. Max Ventures and Max India rallied more than 7 percent each.

 

2 percent in last 15 days. It was quoting at Rs 588.70, up Rs 72.25, or 13.99 percent on the BSE at 1012 hours IST.

"Axis Bank is set to acquire more than 20 percent stake in Max Life Insurance through fresh issue of equity," reports The Economic Times quoting multiple sources.

The proposed deal is aimed at building a strategic and long-term relationship with Axis Bank, which contributes more than 54 cent to Max Life's revenue, the report said.

Axis Bank is expected to infuse more than Rs 2,000 crore in the insurer, it added.

Country's fourth-largest private sector lender in terms of market capitalisation currently owns a little over 2 percent of Max Life Insurance.

In addition, CNBC-TV18 reports indicated that Max Financial Services and Max Life Insurance have called a joint board meeting today to discuss stake sale of Max Group chairman Analjit Singh in a group company.

Sources told the business channel that the boards of the two companies are likely to discuss a proposal under which Axis Bank is expected acquire a part stake belonging to Analjit Singh in Max Financial Services.

Analjit Singh, chairman of Max Group, owns 28.31 percent stake in Max Financial Services and 71.54 percent of his holding in the company is pledged.

Axis Bank's move to acquire stake from Analjit Singh will help the Max Group chairman to deleverage his pledged position and the move will help Axis Bank get an indirect entry into the life insurance space through Max Life Insurance, which is a subsidiary of Max Financial Services.

As a results, other Max group stocks were also on buyers' radar. Max Ventures and Max India rallied more than 7 percent each.

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First Published on Feb 20, 2020 11:09 am
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