New Delhi
The board of Axis Bank has approved 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 presently holds a 72.5% stake in Max Life and Mitsui Sumitomo Insurance (MSI) owns 25.5% stake. Axis Bank also has 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.
Post completion of the series of transactions, Max Life will become a 70:30 joint-venture between Max Financial Services and Axis Bank. The proposed transactions are subject to approval of requisite corporate and regulatory authorities.
Max Life Insurance Company had a turnover of ₹19,987 crore in 2019.
Axis Bank expects the transaction to complete in six to nine months, subject to regulatory approvals.
Axis Bank and Max Life Insurance have had a business relationship for over a decade, providing long term saving and protection products to over 19 lakh customers. The total premium generated through this relationship has aggregated to over Rs. 38,000 crore.
Announcing the transaction, Amitabh Chaudhry, MD and CEO, Axis Bank, said: “We continue to believe in the long term prospects of India’s under-penetrated life insurance space, current environment notwithstanding. We see this joint venture creating immense value for our stakeholders given our long standing, high performing partnership with Max Life. We believe this transaction will allow us to deepen our working relationship leading to better integrated teams and infrastructure and a superior alignment in our approach.”
Analjit Singh, Founder and Chairman, Max Group, said: “I believe that in Axis, we have found an exceptional partner and we have conviction that this will make Max Life fundamentally stronger, better performing and will bring stability to the franchise. We will run the organization as if it’s an equal partnership, a philosophy which has held us in good stead earlier as well.”
Axis Bank shares were trading 3.5% higher at ₹442.
