Axis Bank said that the definitive agreements have been executed and the bank and Max Life will shortly approach the respective regulatory authorities with revised applications for their consideration and approval.
Axis Bank today proposed to acquire just over 17 per cent of the equity share capital of Max Life, which will result in the bank’s total ownership of 18 per cent after the transaction. The bank said that the parties have executed the definitive agreements and Axis Bank and Max Life will shortly approach the respective regulatory authorities with revised applications for their consideration and approval. Earlier this year, the board of Axis Bank had approved the purchase of an additional 29 per cent stake in Max Life Insurance which could have taken the private lender’s total stake in the insurer to 30 per cent.
Axis Bank and Max Life Insurance have business relationships for over a decade. Together, they sell long term savings and protection products to over 19 lakh customers and the total premium generated through this relationship has aggregated to more than Rs 38,000 crore.
Media reports suggested that Max Life Insurance and Axis Bank have modified some terms of their proposed joint venture (JV) in order to comply with regulatory norms as the Insurance Regulatory and Development Authority of India (IRDAI) in June raised concerns over four clauses in the agreement. As per the previous approvals, Max Life was supposed to become a 70:30 joint-venture between Max Financial Services and Axis Bank post the completion of transaction, however, it was subject to the approval of requisite corporate and regulatory authorities. Meanwhile, Axis Bank has raised Rs 10,000 crore via Qualified Institutions Placement (QIP) — a way for listed companies to raise capital without having to submit legal paperwork to market regulators — on August 10.