Max Financial, Axis Bank gain up to 6% on Max Life Insurance deal

Topics Axis Bank | Markets | Max Financial

Shares of Max Financial Services and Axis Bank were trading up to 6 per cent higher on the BSE on Tuesday after the private sector lender said it would acquire an additional 29 per cent stake in Max Life Insurance. Max Financial Services, Max Life's parent company, will hold the remaining 70 per cent in the joint venture.

At 01:53 pm, Max Financial Services was up 6 per cent at Rs 478 on the back of an over two-fold jump in trading volumes. The stock hit an intra-day high of Rs 492 after recovering 14 per cent from its early morning low of Rs 430 on the BSE. Around 11 million shares have changed hands on the counter on the NSE and BSE so far.

Shares of Axis Bank were trading 5 per cent higher at Rs 449, after hitting an intra-day high of Rs 451 on the BSE. In comparison, the S&P BSE Sensex was up 0.78 per cent or 246 points at 31,990 at 1:50 PM.

Axis Bank and Max Financial Services today announced the signing of definitive agreements to become joint venture partners in Max Life Insurance Company Limited (Max Life). The development will result in a mutually beneficial and enduring relationship between Axis Bank and Max Life and bring the stability of a long term partnership to India’s fourth largest private life insurance franchise,” the two companies said in separate regulatory filings.

The joint venture arrangement will significantly improve Max Life’s competitive position vis a vis its competitors, including the other large bank owned private life insurers.

After the completion of these transactions, Max Life would become a 70:30 joint venture between Max Financial Services and Axis Bank. The proposed transactions were subject to approval of requisite corporate and regulatory authorities (including the Insurance Regulatory and Development Authority of India, the Reserve Bank of India and the Competition Commission of India), the bank said. CLICK HERE TO READ FULL REPORT

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