Max Financial: Insurance Biz Sale Plan

Shares of Max Financial Services jumped 11% in Thursday’s trade on talks of India’s fourth-largest private sector lender Axis Bank is set to acquire more than 20% in Max Life Insurance through fresh issue of equity. Max Financial is the holding company of Max Life Insurance.

Through this deal Axis Bank aims to build a strategic and enter the insurance sector, which contributes more than 54% to Max Life’s revenue.

Max Financial Services and Max Life Insurance have called a joint board meeting on February 20 to discuss stake sale of chairman Analjit Singh in a group company.

The boards of two companies are likely to discuss a proposal under which Axis Bank is expected acquire a part stake belonging to Singh in Max Financial Services.

Singh owns 28.31% stake in Max Financial Services and 71.54% of his holding in the company is pledged.

Axis Bank’s move to acquire stake from Singh will help the Max Group chairman to deleverage his pledged position. Axis Bank is expected to infuse more than Rs 2,000 crore in the insurer.

Max Life Insurance is India’s largest non bank-owned life insurer. Max Life offers comprehensive long-term savings, protection and retirement solutions through its high-quality agency distribution and multi-channel distribution partners.

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