Ritik Gupta
The Insurance Regulatory and Development Authority of India (IRDAI) has given its formal authorization 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 clearance was a crucial measure in this long-awaited joint venture transaction which was first declared in April 2020.
As per the proposed transaction, Axis Entities have the liberty 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 part of the transaction.
Max Financial Services said in a statement that also, Axis Entities have the liberty to acquire an additional stake of up to 7 percent in Max Life, in one or more tranches, which they plan to acquire over the next few years.
Analjit Singh, Chairman of Max Group and Max Financial Services (holding company of Max Life Insurance) asserted that this joint venture will bolster their stance as a top leader in the Indian life insurance sector which is exhibiting apparent evidence of abrupt and undergoing growth.
Adding to this, Mohit Talwar, Managing Director, Max Financial Services who has led the transaction asserted that since all other regulatory, shareholder and Board authorizations are already in place, they will now continue towards rapid finalisation of this transaction.
After an advisory by the Reserve Bank of India, Axis Bank and its subsidiaries consented to enter into revised agreements with Max Financial for the acquisition of up to 19 percent of the equity share capital of Max Life.
Initially, when Axis Bank and Max Life had addressed the insurance regulator (Insurance Regulatory and Development Authority of India) for a nod to the deal, IRDAI is said to have recommended some modifications in the deal. This entails the ‘value creation options’ proposed in the deal.
