The Insurance Regulatory and Development Authority of India (IRDAI) has given its formal approval for the acquisition of up to 12 percent stake in Max Life Insurance by Axis Bank and its subsidiaries, Axis Capital & Axis Securities (together Axis Entities).
The IRDAI approval was an integral step in this long-awaited joint venture transaction which was first announced in April 2020.
As per the proposed transaction, Axis Entities have the right to acquire up to 19 percent stake in Max Life, of which, Axis Bank proposes to acquire up to 9 percent and Axis Capital Limited and Axis Securities Limited together propose to acquire up to 3 percent of the share capital of Max Life in the first leg of the transaction.
Max Financial Services said in a statement that in addition, Axis Entities have the right to acquire an additional stake of up to 7 percent in Max Life, in one or more tranches, which they intend to acquire over the course of the next few years.
Analjit Singh, Chairman of Max Group and Max Financial Services (holding company of Max Life Insurance) said that this joint venture will strengthen their position as a top leader in the Indian life insurance sector which is showing clear indications of rapid and enduring growth.
Adding to this, Mohit Talwar, Managing Director, Max Financial Services who has led the transaction said that since all other regulatory, shareholder and Board approvals are already in place, they will now progress towards swift conclusion of this transaction.
Max Life is the fourth largest private life insurer in India while Axis Bank is the third largest private bank. The two companies have shared a successful business relationship for over a decade, providing long-term saving and protection products to nearly 20 lakh customers. The total premium generated through this relationship has aggregated to over Rs 40,000 crore.
After an advisory by Reserve Bank of India, Axis Bank and its subsidiaries agreed to enter into revised agreements with Max Financial for acquisition of up to 19 percent of the equity share capital of Max Life.