Max Life needs nearly Rs 4,000 crore investment in next 5 years

Max Life Insurance is considering an investment of approximately Rs 4,000 crore over the course of the next five years. During a CNBC-TV18 interview, Prashant Tripathy, the Managing Director and CEO of Max Life Insurance said that in case of any shortage, the company's strategy involves observing the effects of factors like risk-based solvency to determine whether additional capital becomes available.

The primary goal was to ensure sufficient resources for the near future and subsequently assess capital requirements. Tripathy indicated that subordinated debt would be the subsequent avenue to explore in addressing these needs.

“Rs 1,600 crore (infusion from Axis) will give us Rs 800 crore more of raising rate possibility. So, in a way, we have Rs 1,300 crore more of debt possibility. So, with these two put together, we will have enough capital for the next 3-4 years. Over the next 5 years, maybe we will require Rs 4,000 crore,” said Tripathy.

On August 9, Axis Bank, in conjunction with its affiliated companies, disclosed its intention to procure the remaining 7 percent ownership share in Max Life Insurance. The bank's announcement, as detailed in a stock exchange submission, highlighted that the Committee for Acquisitions, Divestments, and Mergers had given the green light for a capital infusion of Rs 1,612 crore into Max Life through preferential allocation.

Max Life Insurance Company stands as a collaborative effort between Max Financial Services and Axis Bank. Max Life specialises in providing life insurance solutions for both protection and long-term savings, utilizing a variety of distribution methods including agency networks and third-party partners.

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