India's third-largest private lender Axis Bank Ltd has raised its stake in Max Life Insurance Company Ltd (MLIC), a three-way joint venture among Max Financial Services and Mitsui Sumitomo Insurance besides Axis Bank, to 5.99 per cent, according to a stock market disclosure.
Max Financial Services informed the exchanges that while it has sold 3.99 per cent stake for Rs 76.56 crore ($11.2 million), Mitsui
Sumitomo has sold 1 per cent to Axis Bank for Rs 19.19 crore ($2.8 million). Prior to the deal, Axis Bank, was holding 1 per cent stake in the private life insurance company.
After the deal, Max Financial Services, newly demerged entity of Max Group that owns the life insurance arm, Mitsui Sumitomo and Axis Bank own 68.01 per cent, 25 per cent and 5.99 per cent, respectively, in Max Life. The current deal has valued the insurance company at Rs 1,919 crore.
This valuation is as per a pre-set agreement between the stakeholders. Therefore, the actual value of Max Life could be much higher.
Emails sent to spokespersons of Max Financial Services, Mitsui and Axis Bank did not immediately elicit any response.
In October last year, Max Financial Services (earlier called Max India) had informed the exchanges about Axis Bank’s proposal to increase its stake in Max Life.
Recently, private equity firm KKR acquired around 9.95 per cent stake in Max Financial Services. Post this transaction, the promoter stake has come down to a little over 30 per cent with KKR becoming the second-largest institutional shareholder behind Goldman Sachs that owns around 15.5 per cent through two affiliates. Max Financial Services is currently valued at Rs 8,674 crore.
Axis Bank and YES Bank are two of the top five private lenders that are not running own life insurance ventures.
Max India has recently undergone a corporate restructuring to vertically split itself through a de-merger into three separate listed companies. The three business verticals—life insurance, healthcare and allied businesses such as health insurance and specialty films manufacturing—would be listed entities soon.