 "Axis Bank")
Axis Bank will infuse Rs 1,612 crore in Max Life Insurance through preferential allotment, which will result in the private sector lender’s direct stake in the life insurer increasing to 16.22 per cent and the collective stake of Axis Entities increasing to 19.02 per cent.
While Max group founder Analjit Singh continues to be the chairman of Max Life, Axis will have the right to appoint the chairman.
The proposed infusion will help Max Life support its future growth ambitions, augment its capital position, and improve solvency margins, Max Financial said in a statement.
The transaction is subject to regulatory approvals, including Insurance Regulatory and Development Authority of India, Pension Fund Regulatory and Development Authority, Competition Commission of India, and any other requisite approval. Axis Bank has received the requisite approval from the Reserve Bank of India for the proposed acquisition.
Currently, Axis Entities holds a 12.99 per cent stake in Max Life and Max Financial Services holds 87 per cent. After the transaction, Max Financial’s stake in the life insurance company will come down to 80.98 per cent. Also, five nominee directors of Axis Entities and three nominee directors of Max Financial will be on the Board of Max Life.
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“The bank will now enter into a Share Subscription Agreement with Max Life for proposed acquisition through subscription to the Preferential Issue of 142,579,161 fully paid-up equity shares of face value of Rs 10 each, at a fair market value of Rs 113.06 per share,” Axis Bank said in a communication to the stock exchange.
Axis Entities will have the right to purchase equity shares of Max Life equivalent to 0.98 per cent of the equity share capital of Max Life from Max Financial within 42 months from April 6, 2021 as agreed earlier. On April 6, 2021, Axis entities picked up 12.99 per cent stake in Max Life after the board of Max Life recorded the closure of the deal.
Axis Bank shares ended almost flat at Rs 950.30 a piece at the BSE.
