Max Financial Services Ltd (MFSL) on Saturday said IRDAI has approved the proposed transfer of 39.47 crore shares constituting 20.57 percent of the paid-up equity share capital of Max Life Insurance held by Mitsui Sumitomo Insurance to MFSL.

This is in exchange for the issuance of 7.54 crore shares of MFSL, constituting 21.87 percent of issued and paid-up share capital of MFSL.

"MFSL will now proceed for the implementation of the share swap transaction, which will entail swapping by MSI of its 20.57 percent stake in Max Life with a 21.87 percent stake in MFSL by way of issue and allotment of 7,54,58,088 equity shares of Rs 2 each at a price of Rs 565.11 per equity share on a preferential allotment basis," the company said in a statement.

Upon consummation, this will effectively result in MFSL's stake in Max Life increasing to 93.10 percent, it said.

Presently, MFSL holds 72.5 percent stake in Max Life and Mitsui Sumitomo Insurance (MSI) owns 25.5 percent stake.

On November 19, MFSL said it has received approval from the Department of Economic Affairs (DEA), Ministry of Finance for the aforesaid transaction and that the transaction will be consummated upon receipt of approval from the Insurance Regulatory and Development Authority of India (IRDAI).

MFSL had recently announced that Axis Bank and its subsidiaries, Axis Capital Ltd & Axis Securities Ltd (together Axis Entities), have entered into agreements with MFSL for acquisition of up to 19 percent stake in Max Life, in accordance with existing laws and regulations, it said.

Max Life is the fourth largest private life insurer in India while Axis Bank is the third largest private bank, it said, adding, the two companies have had a successful business relationship for over a decade, providing long-term saving and protection products to nearly 20 lakh customers.

The total premium generated through this relationship has aggregated to over Rs 40,000 crore, it said.

First Published:Nov 28, 2020 9:49 PM IST