Axis Bank shares rise 5% on Max Life deal announcement; Q4 earnings eyed
The bank is seen reporting a 5 percent rise in profit and a 15 percent gain in NII on a year-on-year basis, as per a CNBC-TV18 poll.
Shares of Axis Bank rose 5 percent to Rs 448.5 on the BSE on Tuesday after it announced a deal with Max Life Insurance Company. The sentiment also remained upbeat ahead of its Q4 earnings.
The bank is seen reporting a 5 percent rise in profit and 15 percent gain on NII on a year-on-year basis, as per a CNBC-TV18 poll. Slippages are expected to be around Rs 6,500 crore and provisions may be elevated due to slippages and COVID-19 crisis.
The bank announced that it has approved entering into an agreement with MFSL to acquire a 29 percent stake in Max Life Insurance Company. The Bank will acquire shares from Max Financial Services and will sign a Shareholders’ Agreement and a Share Purchase Agreement in relation to the same.
The said transaction is subject to satisfaction of conditions precedent, including receipt of regulatory approvals from Reserve Bank of India, Insurance Regulatory and Development Authority of India and Competition Commission of India, among others, it said in a BSE filing.
Axis Bank, India's fourth-largest private sector lender, already holds under 2 percent stake in Max Life. Post deal, it will become the single-largest shareholder in the insurance firm. Analjit Singh will remain the promoter of Max Life, with similar rights in place.
Welcoming the development, Mr. Analjit Singh, Founder and Chairman, Max Group, said, “This move is an emphatic signal that Max Life will become an even more formidable player in the Indian life insurance space. I believe that in Axis, we have found an exceptional partner and we have a conviction that this will make Max Life fundamentally stronger, better performing and will bring stability to the franchise. We will run the organization as if it’s an equal partnership, a philosophy which has held us in good stead earlier as well.”
First Published: Apr 28, 2020 10:17 AM IST
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