Axis Bank may propose to buy remaining 7% in Max Life at Rs 85/share — Insurance regulator to take final call

Private sector lender Axis Bank is likely to propose a price of Rs 85 per share for acquisition of 7 percent balance stake in Max Life Insurance, sources informed CNBC-TV18. The final decision on accepting the proposal on revised value, however, rests with Insurance Regulatory Development Authority of India (IRDAI).

Earlier, the insurance regulator asked Axis Bank and Max Financial Limited to derive fair marketing and uniform pricing for 7 percent balance stake. Axis Bank had said that it would enter into the revised agreement to acquire 7 percent stake in Max life at fair market value

The last transaction in Max Life happened at Rs 85 per share which was approved by IRDAI. Transactions have also been done at Rs 134 and Rs 166 per share in 2019 and 2021. Now, Axis Bank paying Rs 85 per share would increase deal size to Rs 1,139 crore instead of Rs 429 crore.

CNBC-TV18 has written to Axis Bank and Max Life. However, companies haven't responded so far.

Analysts have given a thumbs-up to this deal, calling it a positive for Max Financial in particular. Jefferies said that the revised deal offers visibility on the bancassurance business from Axis Bank and Max Financial can also offer dividend to investors from additional funds, which can help its promoters deleverage.

Axis Bank shares were trading 1.82 percent lower at Rs 932.75 per piece at 2.40 PM on BSE on Thursday.