India’s third-largest private bank, Axis Bank is planning to purchase a 29% stake in leading insurance company, Max Life Insurance. Reportedly, the bank’s board of directors has approved the acquisition of an additional 29% stake in the insurance company, taking Axis Bank’s overall stake to 30%.
Currently, Max Financial Services owns majority stake of 72.5% in Max Life and 25.5% stake in Mitsui Sumitomo Insurance (MSI). While Axis Bank holds a minor stake in the life insurer, but with this transaction, it would be able to hold a sizeable share in India’s fourth-largest private life insurer.
Earlier in 2019, Max Life Insurance Company had recorded a turnover of Rs 19,987 crores. After the completion of this transaction, the firm would become a 70:30 joint venture between Axis Bank and Max Financial Services.
According to Axis Bank, it expects the transaction to be finalized within the coming six to nine months, however, the proposed transactions are still dependent on the approval of requisite regulatory and corporate authorities.
Speaking on the move, Amitabh Chaudhry, CEO and MD, Axis Bank, said that the company feels that the long-term prospects of the country’s untapped life insurance space holds immense potential, current situation notwithstanding. It hopes that this joint venture would create immense value for its stakeholders given to its high performing, long-standing partnership with Max Life.
Additionally, Axis Bank aims to deepen its working relationship with this transaction, helping both the firms to build better-integrated infrastructure and teams as well as superior alignment in its approach, added Chaudhry.
Meanwhile, Analjit Singh, Chairman and Founder, Max Group, said that the company believes in Axis Bank and claims that the company has found an excellent partner that will help it become fundamentally stronger and better performing as well as endow superior stability to the franchise.