Axis Bank has picked up 4% in Max New York Life Insurance Company, a 74:26 joint venture between Max India .and New York Life International, Llc.
Max India Ltd said, in its filing to the BSE, that the board had approved the proposal to issue 4% stake of MNYL to Axis Bank, the terms of which are currently under finalization.
The amount invested are not disclosed. However, a recent BS report pegged the valuation of Max New York Life at close to Rs 4,000 crore.
Axis bank is also getting into a bancassurance arrangement with Axis, through which the company’s insurance policies would be sold through the bank’s branches from May.
Instead of manufacturing the insurance products by itself, the move could be seen as a step by Axis Bank to make a small entry into this space. There are talks that other corporates like Anil Dhirubhai Ambani Group is looking to shed stake through a mix of private placement and public offer in its life insurance venture, Reliance Life, to step up the growth of the business.
Last week, the Board of Directors of MNYL approved the proposal for a proposed corporate agency tie-up between MNYL and Axis Bank for a term of 10 years whereby Axis Bank would be distributing life insurance products of MNYL pan India effective May 01, 2010.
The proposal for the corporate agency tie-up and issuance of shares of MNYL are subject to regulatory approvals, it said.