Bain Capital-backed Axis Bank will acquire a 9.9% stake in the promoter entity of Max Bupa Health Insurance Company for Rs 90.8 crore.
Axis Bank entered into definitive agreements with Fettle Tone LLP and its partners on March 13 for the purchase.
Fettle Tone, a special purpose vehicle set up by True North Fund VI LLP in May 2019, holds about 55.6% stake in the health insurance firm.
Max Bupa Health Insurance is a joint venture between private equity group True North and Bupa, a global health insurance and healthcare company. Till December 15, 2019, it was a JV of two promoter entities – Max India Limited and Bupa Singapore Holdings. Post that, Max India exited the Max Bupa JV and its shares were transferred to Fettle Tone.
The acquisition is proposed to be completed on or before March 17, 2021, the filing said.
The object of the acquisition is to “strengthen Axis Bank’s position in the insurance sector,” it added.
Fettle Tone had a turnover of Rs 0.16 crore in March 2020 and its net worth stands at Rs 706 crore.
The announcement comes after VCCircle reported in October 2020 that Axis Bank had tweaked its plans and revised agreements with Max Financial Services to acquire a around 19% stake in Max Life Insurance Company.
Axis Bank and subsidiaries got the insurance regulator’s approval in October last year to pick up a 12% stake in Max Life Insurance. The bank will itself initially buy 9.002% while Axis Capital and Axis Securities will purchase up to 3%. The two units will also have the right to acquire another 7-19% stake in the firm. This paves the way for Axis firms to become a joint venture partner in the life insurance company.
Axis Bank had in April last year decided to buy a 29% stake in Max Life Insurance but reduced the size of the stake to 17% in August after objections from the insurance regulator.
The lender had first invested in Max Life Insurance a decade ago. Its plan to take a bigger stake in the insurer was aimed at beefing up its presence in the insurance industry.