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Axis Bank to acquire remaining 7per cent stake in Max Life

Jan 11, 2023

By: BlinkX Research Team

Axis Bank has entered into a revised agreement to acquire an additional 7 per cent stake in Max Life Insurance at fair market value. 

Axis Bank said in an exchange filing on Tuesday, “earlier, Axis Entities had collectively acquired 12.99 per cent of the equity share capital of Max Life. We have entered into revised agreements with Max Financial agreeing that the valuation for the right to acquire the balance 7 per cent equity stake of Max Life would be at fair market value using discounted cash flows.”

“In this regard, we would like to inform you that Axis Entities have entered into revised agreements with Max Financial on January 9, 2023, agreeing that the valuation for the right to acquire the balance 7.00% equity stake of Max Life would be at Fair Market Value using Discounted Cash Flows instead of valuation as per Rule 11UA of the Income Tax Rules, 1962. This revision has been done consequent to the guidance received by Max Life from the Insurance Regulatory and Development Authority, the private lender's said in the regulatory filing.

In 2020, Axis Bank and Max Financial Services had first announced the deal under which the lender proposed to acquire 29 percent stake in Max Life Insurance. "Should the merger not be completed by a pre-agreed timeline, the parties have contractually agreed on certain other outcomes which are detailed in the transaction documents, including a swap of Axis Bank shareholding to Max Financial, tax consequence of which will be equally borne by the parties," the companies had said in a regulatory filing and also described them as 'Value Creation Options', it added.

Meanwhile, shares of Axis Bank were trading lower at ₹947 apiece on the BSE.