Axis Bank enters into revised pact with Max Fin Serv for acquiring additional 7 pc stake in Max Life

Axis Bank and its subsidiaries — Axis Securities and

— had in 2021 entered into definitive agreements with for acquiring 20 per cent stake in its subsidiary Max Life Insurance Co Ltd. Following this, Axis Entities had collectively acquired 12.99 per cent of the equity share capital of Max Life.

In a regulatory filing on Tuesday, Axis Bank said Axis Entities have entered into revised agreements with

on January 9, 2023.

As per the revised agreement, “…the valuation for the right to acquire the balance 7 per cent equity stake of Max Life would be at fair market value using discounted cash flows instead of valuation as per Rule 11UA of the Income Tax Rules, 1962.”

The revision, the stock exchange filing said, has been done consequent to the guidance received by Max Life from insurance regulator IRDAI.

Discounted cash flow refers to the estimated value of an investment based on future cash flows.

It may be mentioned that the IRDAI had in October, last year, slapped Rs 3 crore and Rs 2 crore fines on Max Life Insurance and Axis Bank respectively for violation of various provisions relating to the deal. The penalty on Max Life Insurance was for violation of IRDAI’s direction, misrepresentation to obtain approval, and contravention of share transfer directions. Axis Bank was fined for making undue gains in the deal and violation of norms.

Shares of Axis Bank closed at Rs 951.90, down 0.73 per cent on the BSE. Max Financial Services shares went up 4.11 per cent at Rs 770.45 on the BSE.