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Grapevine: GAIL eyes stake in IGX; Axis Bank’s proposed Max Life deal under lens
Photo Credit: VCCircle

State-owned GAIL (India) Ltd plans to acquire close to 26% stake as a promoter in India’s first natural gas exchange that went online last week, two people aware of the development told Mint citing an expression of interest.

GAIL owns liquefied natural gas (LNG) terminals and is already a member of the natural gas trading platform Indian Gas Exchange or IGX, set up by Indian Energy Exchange.

“A transparent and neutral natural gas trading platform commonly known as ‘Gas Exchange’ can further facilitate the market-based mechanism. Additionally, the Gas Exchange is also expected to drive competition, leading to innovative business models and cost-efficient structures, thus supporting the overall affordability of gas," the expression of interest said.

Separately, Axis Bank Ltd’s proposal to form an insurance joint venture (JV) with Analjit Singh’s Max Financial Services Ltd through a 29% stake purchase in Max Life Insurance has hit a regulatory wall, two people aware of the development told Mint.

The Insurance Regulatory and Development Authority of India (Irdai) has sought clarifications on four key clauses in the JV agreement, one of the two people said.

Firstly, Irdai has asked both firms to clarify a clause related to a merger of Max Life with Max Financial Services in the future.

Another key clause is a put option that allows Axis Bank to exit the venture at a price of Rs 294 apiece if the value creation options are not consummated within 63 months of closing the deal.

Irdai has also sought a change in a clause that empowers one of the two parties to appoint auditors for the proposed JV.

Moreover, the regulator has asked for the removal of a clause that relates to the presence of an observer in Max Life’s board meetings.

Max Financial Services has called this report mischievous, malicious and malafide in a stock-exchange filing.

“We deal with multiple regulators during various corporate transactions. In a multi-step corporate transaction such as this, it is a part of the normal process for the regulatory authorities to seek clarifications from time to time. We would like to reaffirm that the transaction is progressing on course,” it said.

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