1 min read.Updated: 19 Nov 2020, 03:26 PM IST Written By Anulekha Ray
At present, Max Financial Services holds a 72.5% stake in Max Life and MSI owns 25.5% stake
The transaction entails swapping by MSI of 20.6% stake that it holds in Max Life with a 21.9% stake in MFSL
Max Financial Services Limited on Thursday said it has received approval from the Department of Economic Affairs for swap of of Mitsui Sumitomo's stake in Max Life. "Max Financial Services Limited (MFSL) announced that it has received approval from the Department of Economic Affairs (DEA), Ministry of Finance for the issue and allotment of 7,54,58,088 equity shares of Rs. 2/- each (equivalent to 21.87% of the paid-up share capital) of MFSL to Mitsui Sumitomo Insurance Company (MSI)," the company said in the regulatory filing.
"This preferential issuance is in consideration for the transfer of equity shares constituting 20.57% of the paid-up share capital of Max life Insurance Company Limited (Max Life) held the by MSI to MFSL as part of the Share Swap Transaction," the company further added.
"The transaction will be consummated upon receipt of approval from Insurance Regulatory and Development Authority of India (IRDAI)," the official statement mentioned.
At present, Max Financial Services holds a 72.5% stake in Max Life and MSI owns 25.5% stake. Commenting on the development, Mohit Talwar, managing director, 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."
The transaction entails swapping by MSI of 20.6% stake that it holds in Max Life with a 21.9% stake in MFSL. This will result in MFSL's stake in Max Life increasing to 93.10%.
MFSL had recently announced that Axis Bank and its subsidiaries, Axis Capital Limited & Axis Securities Limited have entered into agreements with Max Financial for acquisition of up to 19% stake in Max Life, in accordance with existing laws and regulations.
Max Financial Services Limited is part of the leading business conglomerate – the Max Group. Focused on Life Insurance, MSFL earned a revenue of Rs. 18,242 crore in FY20.