IRDAI approves Axis Entities’ stake acquisition in Max Life Insurance
Axis to become a Joint Venture partner in Max Life insurance
24thFeb 2021 – New Delhi
Max Financial Services Limited (MFSL) announced today that the Insurance Regulatory and Development Authority of India (IRDAI) has given its formal approval for the acquisition of up to 12% stake in Max Life Insurance Company (Max Life) by Axis Bank and its subsidiaries, Axis Capital Limited & Axis Securities Limited (together Axis Entities).
The IRDAI approval was an integral step in this long-awaited joint venture transaction which was first announced in April 2020.
As per the proposed transaction, Axis Entities have the right to acquire upto 19% stake in Max Life, of which, Axis Bank proposes toacquire up to 9%, and Axis Capital Limited and Axis Securities Limited together propose to acquire up to 3% of the share capital of Max Life in the first leg of the transaction. In addition, Axis Entities have the right to acquire an additional stake of up to 7% in Max Life, in one or more tranches, which they intend to acquireover the course of the next few years.
Welcoming the development, Analjit Singh, Chairman of Max Group and Max Financial Services, said, “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.”
Commenting on the approval, Mohit Talwar, Managing Director, Max Financial Services. who has led the transaction, said,“We are delighted to get this much awaited approval from IRDAI. This is a welcome culmination of all the efforts we have put in to create this value accretive partnership for both companies.
Since all other regulatory, shareholder and Board approvals are already in place, we will now progress towards swift conclusion of this transaction. We hope we will be able to make quick progress in harnessing the synergies and benefits from this joint venture between Max Life and Axis Entities.” A similar endorsement was made by Prashant Tripathy, Managing Director & CEO of Max Life Insurance.
Max Life is the fourth largest private life insurer in India while Axis Bank is the third largest private bank. The two companies have shareda successful business relationship for over a decade, providing long-term saving and protection products to nearly20 lakh customers. The total premium generated through this relationship has aggregated to over Rs. 40,000 crores. Both companies have invested extensively in product and need-based sales training, thereby leading to consistent increase in productivity.
About Max Financial Services Limited:
Max Financial Services Limited (MFSL) is part of the leading business conglomerate – the Max Group. Focused on Life Insurance, MSFL owns and actively manages a 93.1% stake in Max Life Insurance, India’s largest non-bank, private life insurance company. MFSL earned a revenue of Rs. 18,242 crore in FY20. The Company is listed on the NSE and BSE. Besides a 17.3% holding by Analjit Singh sponsor family, some other shareholders include Mitsui Sumitomo, Ward Ferry, New York Life, Baron, Vanguard, First Voyager, Jupiter, Blackrock and the Asset Management Companies of Reliance, HDFC, ICICI Prudential, Motilal Oswal, Aditya Birla Sun Life, Mirae, and Kotak. In April 2020, MFSL announced its intent to bring in India’s third largest private bank, Axis Bank as a JV partner for its life insurance business Max Life.