NEW DELHI: Shares of Max Financial Services climbed 14 per cent in Tuesday’s trade after the NBFC said Axis Bank now wishes to acquire 17 per cent of the equity share capital of its material subsidiary Max Life Insurance Company, resulting in total ownership of 18 per cent post the transaction.
This is against earlier definitive agreements between Max Financial Services and Axis Bank, where the latter was looking to buy 29 per cent stake in the life insurance arm. The changes were made based on correspondence from IRDAI received by the company.
Following the development, the stock rose 13.96 per cent to hit a high of Rs 549.70 on BSE. Axis Bank shares also gained 2 per cent to Rs 445.70 on BSE.
“The parties have executed the definitive agreements. Axis Bank and Max Life will shortly approach the respective regulatory authorities, with revised applications for their consideration and approval. The transaction is subject to regulatory approvals,” the company said.
Earlier, Axis Bank and Max Financial Services had signed agreements for sale of 29 per cent of the equity share capital of Max Life. It would have had the effect of Max Life becoming a 70:30 joint venture between the company and Axis Bank after a series of transactions.
“Earlier, Axis Bank and the company (Max Financial) had agreed to certain value creation options and related rights. Based on correspondence from IRDAI received by the company, Axis Bank and the company have agreed to make some changes to the value Creation Options and factor in some alternate mechanisms subject to regulatory approvals and as may be permitted under applicable law,” Axis Bank had said in a filing in July.