The financial terms of the revised deal were not disclosed.
The private-sector lender's move comes amid reports that the deal, announced in April, ran into a regulatory roadblock over certain clauses in the agreement.
Last month, the Insurance Regulatory and Development Authority of India (Irdai) had communicated to Axis Bank and Max Financial
Services -- the life insurance company Max Life promoted by Max Financial Services -- to make some changes to the value creation options that the two firms were exploring. Irdai had asked them to factor in some alternate mechanisms subject to regulatory approvals.
According to this Business Standard report
, there was a clause in the deal that said that after a little over five years, the entity will go for a listing on the bourses. However, if the listing does not happen, Axis Bank would swap the unlisted Max Life’s 30 per cent holding with the listed entity Max Financial Services, depending on the swap ratio. Further, if even that is not possible, then Axis Bank would have a put option to sell its shares in Max Life at a pre-determined price to Max Financial. Irdai has raised objections to these options included in the deal, said a source, adding there would tweaks to this part.
At 9:47 AM, Max Financial's stock was trading 12.73 per cent higher at 619.70 as compared to 0.32 per cent gain in the S&P BSE Sensex. Around 32 lakh combined shares have changed hands. The stock also posted a fresh 52-week high after surpssing its previous 52-week high of Rs 611.05, hit on March 4, 2020.
Meanwhile, Axis Bank also gained 1.63 per cent at Rs 453 on the BSE. Around 49 lakh shares have already changed hands on the NSE and BSE, combined, so far.
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