Updated: February 25, 2021 11:39:42 am
Shares of Max Financial Services hit a record high on Thursday, a day after the company announced it has received a formal approval by the Insurance Regulatory and Development Authority of India (IRDAI) for the acquisition of up to 12 percent stake in Max Life Insurance by Axis Bank and its subsidiaries – Axis Capital and Axis Securities (together Axis Entities).
Max Financial Services stock hit a 10 per cent upper circuit to Rs 938.65 apiece, also its record high on the BSE earlier in the day. On NSE, it touched a 52-week high of Rs 953.70 per share in the early trade.
Meanwhile, the share of Axis Bank rose as much as 4.29 percent to its intraday high of Rs 780.85 per share on the BSE, while on NSE, it climbed 4.22 per cent to Rs Rs 781.00 so far in the intraday trade.
As per the proposed transaction, Axis Entities have the right to acquire up to 19 per cent stake in Max Life, of which, Axis Bank proposes to acquire up to 9 per cent, and Axis Capital and Axis Securities together propose to acquire up to 3 per cent of the share capital of Max Life in the first leg of the transaction, Max Financial Services said in an exchange filing to the BSE.
Axis Entities have the right to acquire an additional stake of up to 7 per cent in Max Life, in one or more tranches, which they intend to acquire over the course of the next few years, it added.
“We have been looking forward to bringing Axis Bank in this construct as a joint venture partner in Max Life. Our long and successful business association with them has demonstrated to us their value across customer insights, distribution expertise and other functional benefits which will be highly useful for the business. I am confident that this joint venture will strengthen our position as a top leader in the Indian Life Insurance sector which is showing clear indications of rapid and enduring growth,” said Analjit Singh, Chairman of Max Group and Max Financial Services.
Max Life is the fourth largest private life insurer in India while Axis Bank is the third largest private bank.
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