Axis Bank is planning to increase its stake in Max Life Insurance, which is a subsidiary of Max Financial Services, by investing Rs 336 crore. This will raise the combined ownership of Axis entities in Max Life from 19.02 per cent to 19.99 per cent.
As per the regulatory filing, the acquisition will reach its completion stage within a 2-3 month period (subject to receipt of all regulatory approvals). The increase in stake is expected to "strengthen the bank's position in the life insurance business."
On June 19, the shares of the private lender closed at Rs 1,229 price level, up by 3.11 per cent on the National Stock Exchange.
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"....Axis Bank Limited and its subsidiaries, i.e., Axis Securities Limited and Axis Capital Limited (together referred to as “Axis Entities”) have entered into agreements (including amendments thereto) with Max Financial Services Limited (“Max Financial”), relating to acquisition of equity stake of Max Life Insurance Company Limited (“Max Life”) and matters incidental thereto," the lender stated in an exchange filing.
Last year Axis Bank received regulatory approval to invest Rs 1,612 crore into Max Life Insurance by subscribing shares on a preferential basis. This had reportedly taken Axis entities' stake to 19.02 per cent.
"We would now like to inform you that the Acquisitions, Divestments and Merger Committee of the Board of Directors of the Bank at its meeting held on June 19, 2024, has approved a proposal for acquisition of additional equity shares of Max Life by the Bank for an amount of upto Rs. 336 crore," the regulatory filing further read.
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The private lender had announced its agreement to acquire a stake in Max Life Insurance back in 2021.
On annual basis, the shares of the banking firm have delivered a return of more than 27 per cent on NSE.
