Max Financial Services share price rose in early trade today amid reports that private sector lender Axis Bank was in talks to buy 20% stake in Max Life Insurance through fresh issue of equity shares. Axis Bank is likely to infuse more than Rs 2,000 crore into the insurer. The money will be utilised toward funding of Max Life's expansion plan. Max Financial is the holding company of Max Life Insurance.
Share price of Max Financial Services rose up to 15.71% to Rs 597.60 compared to the previous close of Rs 516.45 on BSE. Max Financial Services stock has gained 22% in last four days.
The stock opened 4.77% higher at Rs 541 on BSE. Market capitalisation of the firm rose to Rs 15,900 crore in early trade. The large cap stock has gained 50% during the last one year. It has risen 11% since the beginning of this year. 3.78 lakh shares changed hands amounting to turnover of Rs 21.88 crore on BSE.
The deal will enable strategic and long-term relationship with Axis Bank, which contributes more than 54 per cent to Max Life's revenue, according to a report in The Economic Times. The deal will also make available for the insurer a strong and strategic bancassurance partner, the ET report said.
Currently, Axis Bank has over 2% stake in Max Life. Boards of Max Financial and Max Life are scheduled to meet today to discuss the details of the deal, according to the report.
Written by Aseem Thapliyal