Shares of Max Financial Services were up 13.5% in noon trade at Rs 624 on Tuesday.
From Axis Bank’s perspective, the stake is lower but Axis Bank retains control/right, said CLSA.
For Max Financial, the revision further reduces uncertainty of a long-term distribution tie-up with Axis Bank and Max Financial retains a higher stake in the life insurance company, it added.
“Max Financial has steadily gained share; clarity on long-term distribution and a change in control to Axis Bank may drive further rerating,” the global brokerage said.
“We factor in an 82% stake in Max Life from 70% earlier and a reduced regulatory discount to arrive at a new Rs 720 target price, implying a conservative 2.35 times Jun-22 P/EV,” said Max Life.