Axis Bank Ltd., Max Financial Services Ltd. and Max Life Insurance Company Ltd. signed a confidentiality and exclusivity pact to explore the possibility of the private lender entering into a long-term strategic partnership with the life insurer.
The deal is subject to receipt of applicable regulatory approvals and corporate authorisations, satisfactory completion of due diligence, and execution of definitive documentations, according to an exchange filing.
Max Financial Services holds a 72.5 percent stake in Max Life, while Mitsui Sumitomo Insurance and Axis Bank hold 25.5 percent and 2 percent stake, respectively, the filing said.
“We believe that the potential transaction will provide a fillip to the life insurance sector overall,” Analjit Singh, founder and chairman of Max Group, said in the filing.
Amitabh Chaudhry, managing director and chief executive officer at Axis Bank, said, “We have had a long-standing bancassurance relationship with Max Life and the ongoing discussions are a step further to deepen and strengthen this strategic partnership. The successful completion of the proposed transaction is expected to create significant value for all stakeholders.”
Max Life’s bancassurance pact with Axis Bank—that contributed 55 percent to the insurer’s business in the nine months ended December—is due for renewal in September 2021. To be sure, the filing doesn’t mention anything about the renewal of the bancassurance agreement.
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