Today morning, Axis Bank announced that its Board has approved purchase of an additional 29% stake in Max Life Insurance. With this, the Bank’s stake in Max Life Insurance stands at 30%.
Currently, Max Financial Services holds a 72.5% stake in Max Life and Mitsui Sumitomo Insurance (MSI) owns 25.5% stake.
The transaction will take 6-8 months for completion and post that, Max Life will become a 70:30 JV between Max Financial Services and Axis Bank. The Bank will also have the right to nominate 3 directors while Max Financial can nominate 4 directors to the board of Max Life.
The Bank is also expected to announce its Q4FY20 earnings today and most analysts expect a sharp decline in profits due to higher provisioning. Margins though are expected to remain stable.
The stock price has reacted positively to the news of its increased stake and it rose 5% to Rs.448.50 and is presently trading at Rs.442 levels.