Categories: Banking

Axis Bank Enters into Revised Pact with Max Financial Services for Acquiring Additional 7% Stake in Max Life

Private lender Axis Bank has informed the exchanges that it has entered into a revised agreement with Max Financial to acquire the remaining 7 percent stake in the latter. The parties agreed that the valuation for the right to acquire the remaining 7 percent stake of Max Life will be through fair market value using discounted cash flow instead of valuation as per Rule 11UA of the Income Tax rules, 1962. Axis Entities have earlier acquired 12.99 percent stake in Max Life at Rs 35 per share with the right to acquire an additional 7 percent stake in the company.

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More About This Acquisition:

In October last year, the Insurance Regulatory and Development Authority (IRDAI) had imposed a penalty of Rs 3 crore on Max Life and Rs 2 crore on Axis Bank due to violations of rules in the proposed deal. The deal was first announced in 2020, under which, Axis Bank proposed to acquire a 29 percent stake in Max Life Insurance.

Significance of this deal:

It clears the way for the regulatory clearance for the deal. It also ensures that Max Financial will get more money for their stake in Max Life. This deal also means that the uncertainty over the Axis Bank Bancassurance tie-up with Max also goes away.
Piyush Shukla

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