Max Financial Services Limited (MFSL) has received the Finance Ministry’s approval for Tokyo-headquartered Mitsui Sumitomo Insurance Company (MSI) to pick up 21.87 per cent stake in the listed company. For this purpose, MFSL will issue and allot 7,54,58,088 equity shares of ₹2 each to MSI.
This preferential issuance is in consideration for the transfer of equity shares constituting 20.57 per cent of the paid-up share capital of Max life Insurance Company Limited held by MSI to MFSL as part of the share swap transaction.
The transaction will be consummated upon receipt of approval from the Insurance Regulatory and Development Authority of India (IRDAI).
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Mohit Talwar, MD, Max Financial and Vice Chairman, Max Group, said, “Once concluded post regulatory approvals, this transaction will mark an important step for Max Financial to consolidate its shareholding in Max Life paving the way for a new beginning in form of a joint venture with Axis Bank.”
Max Financial Services presently holds a 72.5 per cent stake in Max Life and MSI owns 25.5 per cent stake in the life insurer.
In essence, the transaction entails swapping by MSI of 20.6 per cent stake that it holds in Max Life with a 21.9 per cent stake in MFSL. This will result in MFSL’s stake in Max Life increase to 93.10 per cent.
MFSL had recently announced that Axis Bank and its subsidiaries, Axis Capital Limited and Axis Securities Limited (together Axis Entities), have entered into agreements with Max Financial for acquisition of up to 19 per cent stake in Max Life, in accordance with existing laws and regulations.
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