Axis Bank faces setback as RBI does not consider the direct acquisition of 17% stake in Max Life

After RBI didn’t consider the earlier agreement, Axis Bank will acquire upto 9.002%, Axis Capital and Axis Securities will together acquire upto 3.000% of the share capital of Max Life, under revised agreement.

Oct 30, 2020 04:10 IST India Infoline News Service

Axis Bank and its subsidiaries, i.e. Axis Capital Limited and Axis Securities Limited (together “Axis Entities”), have agreed to enter into revised agreements with Max Financial for the acquisition of up to 19.002% of the equity share capital of Max Life (“Revised Agreements”). Axis Bank’s total stake in MLI will remain within the limits stipulated under the applicable laws and regulations.

Under the Revised Agreements, Axis Bank will acquire up to 9.002% of the equity share capital of Max Life, and, Axis Capital Limited and Axis Securities Limited will together acquire up to 3.000% of the share capital of Max Life. In addition, Axis Entities will have a right to acquire an additional stake of up to 7.000% of the equity share capital of Max Life, in one or more tranches, in accordance with existing laws and regulations.

Earlier, Axis Bank and Max Financial Services had entered into definitive agreements on August 24, 2020, for the direct acquisition of 17.002% of the equity share capital of Max Life Insurance Company Limited (“Max Life”), a material subsidiary of the Max Financial, by Axis Bank.

In response to Axis Bank’s application to the Reserve Bank of India for directly acquiring 17.002% of the equity share capital of Max Life, the Reserve Bank of India has advised Axis Bank that the application for the direct acquisition of 17.002%% has not been considered.

Axis Bank Ltd ended at Rs492.40 per piece down by Rs1.3 or 0.26% from its previous closing of Rs493.70 per piece on the BSE.

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