Axis Bank, India’s third largest private sector bank, together with subsidiaries Axis Capital and Axis Securities, has picked up a 12.99% stake in Max Life Insurance Company to become co-promoter.
The transaction was approved by the Insurance Regulatory and Development Authority of India in February, the Bain Capital-backed bank said in a statement.
The Axis entities have a right to acquire an additional stake of up to 7% in Max Life, India’s fourth largest private life insurance, in one or more tranches, subject to regulatory approvals.
It took more than a year for the deal to get completed as Max Life’s holding company Max Financial Services and Axis Bank had first announced their intent to be strategic partners in February last year.
Post the deal, Max Life’s board will be strengthened further, with the co-option of three nominee directors of the three Axis entities, the statement added.
In October last year, Axis Bank had tweaked for a second time its plan to acquire a stake in Max Life in a bid to secure regulatory approvals for the deal.
Axis Bank and Max Life have had a business relationship for over a decade with over 20 lakh customers. The total premium generated through this alliance has aggregated to over Rs 40,000 crore.
Max Life’s assets under management (AUM) grew 23% year-on-year to Rs 84,724 crore as on December end 2020, with the AUM more than doubling in less than four years.
The lender had first invested in Max Life a decade ago. Its plan to take a bigger stake in the insurer was aimed at strengthening its presence in the insurance industry.
Last month, VCCircle reported the Amitabh Chaudhury-led bank will acquire a 9.9% stake in the promoter entity of Max Bupa Health Insurance Company for Rs 90.8 crore.