India's third-largest private lender Axis Bank Ltd will raise its stake in Max Life Insurance Company Ltd, a three-way joint venture among Max India Ltd, Mitsui Sumitomo Insurance Co Ltd and Axis Bank. Max India's board approved the plan on Friday.
Max India currently owns 72 per cent in the private life insurer with Mitsui Sumitomo holding 26 per cent and Axis Bank having the balance 2 per cent stake. Max India did not disclose further details on the proposed transaction and whether it involves stake purchase from existing shareholders or fresh infusion of capital.
Axis Bank and YES Bank are two of the top five private lenders not to run their own life insurance ventures.
This comes at a time when billionaire Analjit Singh-controlled diversified firm Max India is splitting into three companies with the existing firm becoming India's first listed company with life insurance as the sole business.
The firm will demerge into three business verticalsâlife insurance, healthcare and allied businesses such as health insurance and specialty films manufacturing.
Post demerger, Max India will be renamed as Max Financial Services Ltd (MFS) and will focus solely on the group's flagship life insurance activity through its majority holding in Max Life. In April 2012, Japanese insurance company Mitsui Sumitomo Insurance bought out US-based New York Life's 26 per cent stake in Max New York Life Insurance for Rs 2,731 crore. Post this, the firm was rebranded as Max Life.
As of September 30, 2015, Max Life Insurance ranked as the fifth-largest private life insurer.