We believe the risk-reward equation is not in favour of Max Financial Services shareholders regarding IDBI Federal Life Insurance stake sale, said Analjit Singh, founder and Chairman, Max Group.

Speaking exclusively to CNBC-TV18, he said Max Life Insurance had made aggressive bids for IDBI Federal Life Insurance. But the prerequisites we had asked, like performance guarantees etc, are unlikely to be given by IDBI Bank and Federal Bank.

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IDBI Federal Life Insurance stake sale: Sellers put fresh conditions

IDBI Federal Life is a joint venture between IDBI Bank and Federal Bank, with Belgium-based Ageas SA/NV as the foreign partner.

While IDBI Bank holds a 48% stake in the venture, Federal Bank and Belgian life insurer Ageas hold 26% each.

Singh said he was not sure if they had written to IDBI Federal Life Insurance or JP Morgan.

Global investment bank JPMorgan was appointed by IDBI Bank and Federal Bank to sell the stake in IDBI Federal Life Insurance earlier this year.

However, Max Life Insurance will continue to focus, build and invest in our two most powerful bancassurance partnerships with Axis Bank and Yes Bank, he said.

He also confirmed that they have not heard back from IDBI Bank, Federal Bank and JP Morgan as yet.

In case, IDBI Bank and Federal Bank do not accede to the prerequisites, then, maybe Max Life Insurance would give up on the deal, said Singh, adding that the deadline is by end of tomorrow.

He said one of the reasons behind the discomfort arising is the possibility of change of control at IDBI Bank and they want to make sure that if IDBI Federal Life Insurance was merged into any other entity, Max Life Insurance's exclusivity with IDBI would continue.

Second reason was, even if IDBI Federal Life Insurance stayed within its current ownership, they were not able to achieve the sales volume that Max Life Insurance expects.

Third, is the debts are now clear with regards to Axis Bank and Yes Bank.

"We believe since we have such strong level of integration and working with Axis Bank, why distract ourselves from continuing to build on success with Axis Bank and Yes Bank. So, in absence of those assurances, it's not worth it,” said Singh.

When asked about his own vision of the insurance business, he said given the track record and performance of the company, “I feel it would be stupid to want not to bet and work and build on Max Life Insurance."

He also confirmed that the validity agreement with Axis Bank can be extended by another 10 years post 2021, adding that, the fee based income that Axis Bank gets from Max Life Insurance is a substantial part of Axis Bank's business as well, "There is high level of inter dependency on each other and we are integrated to the core."

Singh said if IDBI Bank and Federal Bank deal doesn’t work, then the company would focus on existing bancassurance relationships.