The Insurance Regulatory and Development Authority of India (IRDAI) has approved Max Financial Services Ltd (MFSL)‘s proposals to purchase the balance 5.17 per cent stake held by Mitsui Sumitomo Company Ltd (MSI) in Max Life Insurance Company Ltd (Max Life). The transaction is expected to be concluded in the next fortnight.

This transaction entails purchase of 9.91 crore shares of Max Life at ₹85 per share by MFSL, the parent company of Max Life, as per the put/ call option approved by the MFSL board on March 3, 2020 and subsequently by its shareholders on May 27, 2020.

Analjit Singh, Chairman, Max Group, said: “The transaction will make the holding company structure simpler and help consolidate our shareholding in Max Life, which will benefit all our shareholders by attracting more investor interest.”

Earlier, MFSL held a 72.52 per cent stake in Max Life and MSI 25.48 per cent stake. 

In December 2020, MFSL swapped 20.57 per cent of the paid-up equity share capital in Max Life held by MSI to MFSL in exchange for 21.87 per cent of the issued and paid-up share capital of MFSL (share swap transaction). 

In March 2021, MSI acquired 0.26 per cent stake from Axis Bank, as a result MSI’s stake in Max Life increased to 5.17 per cent. MFSL was awaiting approval for the transfer of balance stake of 5.17 per cent held by MSI. Post-completion of the buyout of MSI’s balance stake, MFSL’s shareholding in Max Life will increase to 87 per cent.

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