Max Financial Services (MFS), the parent company of Max Life Insurance, has received an approval from the Insurance Regulatory and Development Authority of India (Irdai) to swap Mitsui Sumitomo’s stake in Max Life Insurance with shares of the company, thus consolidating its holding in the life insurance arm.
The transaction entails swapping Mitsui Sumitomo's 20.6 per cent stake in Max Life Insurance with 21.9 per cent stake in MFS, which will result in MFS's holding more than 93 per cent stake in the life insurance company. MFS will issue and allot 75.4 million shares, equivalent to 21.87 per cent of the paid-up share capital to Mitsui Sumitomo, according to the agreement.
Earlier this month, Max Financial Services got Department of Economic Affairs (DEA) on the share swap agreement. Irdai’s approval takes Max Financial Services one step closer to the consummation of its deal with private lender Axis Bank, wherein the lender and its subsidiaries, Axis Capital Limited, and Axis Securities Limited (Axis Entities), will take upto 19 per cent stake in Max Life, in accordance with existing laws and regulations.
Mohit Talwar, MD, Max Financial and Vice Chairman, Max Group, said,“IRDAI’s approval is a very important milestone for the implementation of our Share Swap transaction. We will work to close the transaction as soon as possible.”