After long wait, Max Group sells 13% stake in life insurer Max Life to Axis Bank

The Axis entities have now become co-promoters of Max Life. "The board of Max Life recorded the closure of the deal today," Max Financial Services said in the filing on Tuesday.

According to the company, the transaction was completed after the Insurance Regulatory and Development Authority of India (IRDAI) gave its formal approval in February this year.

Under the deal, the Axis entities also have the right to acquire an additional stake of up to 7 percent in Max Life, in one or more tranches, subject to regulatory approvals.

Three nominee directors of the Axis entities will be part of Max Life's board of directors. For the Max Group founder and chairman Analjit Singh, this is long-awaited deal as in June 2016, he had announced a deal with HDFC Life under a three-way merger. But this was called off a year later due to regulatory hurdles.

Interestingly, Amitabh Chaudhry, the head of Axis Bank now, was at the helm of HDFC Life when the proposed deal with Max fell through. Axis Bank is the only large private sector lender without an insurance arm.

The bank was keen on straight away acquiring over 20 percent stake in Max Life but the Reserve Bank is reportedly not comfortable in allowing banks to have more than 20 per cent stake in the cash guzzling insurance business.