Max Financial Services Limited (MFSL) has announced that insurance regulator IRDAI has approved the capital infusion of ₹1,612 crore by Axis Bank into the company’s material subsidiary, Max Life Insurance.

For this transaction, Max Life Insurance proposes to issue 14.25 crore shares to Axis Bank, which will take the latter’s shareholding in the life insurer to 19 per cent from the existing 13 per cent. Axis Bank proposes to acquire an additional 6 per cent stake in Max Life Insurance at ₹113 per share.

Pension regulator PFRDA has already approved the proposed change in Max Life’s shareholding pattern pertaining to the infusion of capital by Axis Bank.

The transaction is, however, awaiting the Competition Commission of India (CCI) approval.

“Accordingly, the capital infusion of ₹ 1612 Crores by Axis Bank into Max Life will be consummated upon the approval from CCI”, MFSL said in a stock exchange filing.

The IRDAI letter approving the capital infusion transaction was issued on Tuesday.

MFSL said this capital infusion would help support Max Life’s future growth ambitions, augment its capital position and improve solvency margins. 

Axis Bank’s Board had in August last year approved the proposal to infuse ₹1,612 crore in Max Life, resulting in the bank’s direct stake in Max Life increasing to 16.22 per cent and the collective stake of Axis Entities rising to 19.02 per cent. Post this additional 6 per cent acquisition by Axis Bank, the stake of MFSL in Max Life would come down from 87 per cent to 81 per cent. 

In April 2021, Axis Bank and its subsidiaries, Axis Securities and Axis Capital, collectively acquired a 12 per cent stake in Max Life through a secondary transfer from Max Financial.

Related Topics
comment COMMENT NOW