Axis Bank to deepen insurance bet with Rs 389 crore infusion in Axis Max Life; stake seen at 19.99%

In a move that strengthens its play in the insurance space, Axis Bank is set to infuse Rs 389 crore into Axis Max Life through a fresh equity issuance, a step that will take the combined holding of Axis entities close to the regulatory cap of 19.99%.

The capital infusion is expected to bolster Axis Max Life’s balance sheet, enabling it to scale operations, enhance product offerings, and capitalise on rising insurance penetration in India, an opportunity that could translate into long-term value creation for Axis Bank shareholders.

Post the transaction, Axis Bank, along with Axis Securities and other Axis-linked shareholders, will collectively hold up to 19.99% in Axis Max Life, while Max Financial Services will retain a dominant stake of around 80.01%. Additionally, Axis shareholders have the option to acquire an incremental 0.98% stake to fully utilise the permitted holding limit.

The proposal, however, remains subject to shareholder approval and other necessary regulatory clearances.

The development was announced by Max Financial Services Limited late Thursday. Its shares ended 1% lower at Rs 1,462.90 on the NSE.

Meanwhile, Axis Bank shares ended 0.42% higher on Thursday at Rs 1,198.10.Stock markets are closed today for the Good Friday holiday.Shares of Axis Bank have delivered 10% returns over the past year, outperforming benchmarks Nifty and the BSE Sensex, whose returns in the same period stand at negative 3% and negative 4%, respectively.

However, the stock has seen relentless selling pressure over the past month amid significant selling in banks and financials. It has fallen 13% in this period.

Also read: Nifty Bank logs 3rd-worst March fall since the global financial crisis. HDFC Bank, SBI among top culprits

India’s third-largest private lender by market capitalisation reported a 14% jump in its gross advances in the December-ended quarter to Rs 11.70 lakh crore compared to Rs 10.26 lakh crore in the year-ago period. Its total deposits rose 15% YoY to Rs 12.6 lakh crore versus Rs 10.96 lakh crore in the corresponding quarter of the last financial year.

The gross advances increased by 3.7% on a sequential basis, while total deposits grew 4.8% quarter-on-quarter.

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