The Insurance Regulatory and Development Authority of India (IRDAI) has approved the acquisition of up to 12 per cent stake in Max Life Insurance Company by Axis Bank and its subsidiaries (together Axis Entities), the companies said in separate stock exchange filings.
As per the proposed transaction, Axis Entities have the right to acquire up to 19 per cent stake in Max Life, of which Axis Bank proposes to acquire up to 9 per cent, and Axis Capital Limited and Axis Securities Limited together propose to acquire up to 3 per cent of the share capital of Max Life in the first leg of the transaction.
"In addition, Axis Entities have the right to acquire an additional stake of up to 7 per cent in Max Life, in one or more tranches, which they intend to acquire over the course of the next few years," Max Financial Services said.
The IRDAI approval was an integral step in this long-awaited joint venture transaction which was first announced in April 2020, it said.
"We have been looking forward to bringing Axis Bank in this construct as a joint venture partner in Max Life. Our long and successful business association with them has demonstrated to us their value across customer insights, distribution expertise and other functional benefits which will be highly useful for the business," Max Group and Max Financial Services Chairman Analjit Singh said.
Max Financial Services Managing Director Mohit Talwar said, "Since all other regulatory, shareholder and board approvals are already in place, we will now progress towards swift conclusion of this transaction. We hope we will be able to make quick progress in harnessing the synergies and benefits from this joint venture between Max Life and Axis Entities."