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Axis Bank Shares Rise After Decision to Buy 29% Stake in Insurer Max Life

File photo of Axis Bank (Image: Reuters)

File picture of Axis Bank (Image: Reuters)

Max Financial will maintain a 70% stake within the three way partnership partnership.

  • Reuters
  • Last Updated: April 28, 2020, 12:26 PM IST

Axis Bank Ltd mentioned on Tuesday it might purchase a 29% stake in insurer Max Life Insurance, giving India’s third largest private-sector lender a seat amongst rival banks who have already got a foothold within the nation’s life insurance coverage trade.

Axis Bank, which already holds a minority stake in Max Life, will purchase shares from the insurer’s majority proprietor Max Financial Services Ltd to lift its stake to 30%, the Mumbai-based lender mentioned in a regulatory submitting.

Max Financial will maintain a 70% stake within the three way partnership partnership.

Economic Times had earlier on Tuesday reported that the deal may very well be price 16 billion rupees ($209.43 million).

Axis Bank and Max Financial weren’t instantly accessible to verify the deal worth.

“We continue to believe in the long-term prospects of India’s under-penetrated life insurance space, current environment notwithstanding,” mentioned Amitabh Chaudhry, chief government officer of Axis Bank.

India’s life insurance coverage area is dominated by state-run big Life Insurance Corporation, however different personal and public sector lenders maintain massive stakes in life insurance coverage corporations.

Shares of Axis Bank, which rose as a lot as 5% earlier within the session after Economic Times first reported information of the deal, have been final buying and selling up 3.7% at 0613 GMT. Max Financial shares have been up 7.1%.

Axis Bank may have the precise to appoint three administrators and Max Financial can nominate 4 administrators on Max Life’s board. Axis Capital acted as the only real advisor to the financial institution for the deal.

The lender is because of report its March quarter outcomes later within the day.

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