Axis Bank’s board has approved the purchase of an additional 29% stake in Max Life Insurance which will take the private lender’s total stake in the insurer to 30%. Max Financial Services currently holds a 72.5% stake in Max Life and a 25.5% stake in Mitsui Sumitomo Insurance (MSI). Axis Bank also holds a minor stake in the life insurer. Axis Bank is the third-largest private bank and Max Life is the fourth largest private life insurer in India.
Following the completion of the chain of transactions, Max Life will become a 70:30 joint venture between Max Financial Services and Axis Bank. The proposed transactions are subject to the approval of expected corporate and regulatory authorities.
Max Life Insurance Company had an insurance turnover of Rs 19,987 crore in 2019
Axis Bank expects the transaction to be completed in six to nine months, subject to regulatory approval.
Axis Bank and Max Life Insurance have had a business relationship of over a decade, providing long-term savings and protection products to over 1.9 million customers. The total premium generated through this relationship has exceeded Rs. 38,000 crores.
Announcing the transaction, Amitabh Chaudhary, MD, and CEO of Axis Bank, said: “We continue to believe in India’s short-life insurance sector, the long-term prospects despite the current environment. We see this joint venture with Max Life as our long-term, high-performing partnership creating immense value for our stakeholders. We believe this transaction will allow us to move our working relationships towards better-integrated teams and infrastructure and better alignment in our approach. “
The founder and chairman of Max Group, Analjit Singh, said: “I believe that at Axis, we have found an exceptional partner and we believe it will fundamentally strengthen, outperform Max Life and stabilize the franchise “We will run the organization as if it were an equal partnership, a philosophy that put us in a better position than before.”
Axis Bank shares were trading 3.5% higher at a high of 442.