Axis Bank, Max Life Insurance deal has moved a step closer to accomplish the objectives of both the firms and to remove the clauses that occurred in their transaction which has displeased the insurance regulator, two people aware of the development informed.
In April, the deal was announced that Axis Bank will raise its stake in Max Life Insurance from 1% to 30% for Rs 1,592 crore at Rs 28.61 apiece as, it will elevate their bancassurance partnership in the joint venture. Analjit Singh, promoter of Max Financial holds 73.5% in Max Life, Mitsui Sumitomo about 25.5% and the remaining 1% by Axis Bank.
The Insurance Regulatory and Development Authority of India (Irdai) in June, has raised its concern on four clauses in their merging agreement including a put option for Axis Bank to sell its existing stake, a possible merging of Max Life with its parent Max Financial Services, having an ‘observer’ in the board of Max Life and, rights for one of the two companies to appoint their auditors in Max Life.
The Axis Bank-Max Life Insurance Joint Venture is expected to help Max Life in its distribution, like other rivals including SBI Life Insurance, HDFC Life Insurance and ICICI Prudential Life who have their JV partners as Banks or NBFCs.