Max Financial Services Limited (MFSL) informed the exchanges that it has concluded the swap of Mitsui Sumitomo Insurance Company’s (MSI) 20.57% stake in Max Life Insurance Company Limited (Max Life), with 21.87% stake in MFSL.
MFSL said in a stock exchange disclosure that it has allotted 7,54,58,088 equity shares of Rs2/- each constituting 21.87% of the paid-up share capital to MSI, on a preferential allotment basis.
The allotment to the joint venture partner MSI is in consideration for the transfer of equity shares constituting 20.57% of the paid-up share capital of Max Life held by it to MFSL.
Post this allotment, according to the company, the paid-up equity share capital of MFSL stands increased to Rs69,00,65,184/- and will effectively increase MFSL’s stake in Max Life to 93.10%. Prior to the allotment, MFSL held a 72.5% stake in Max Life and MSI owned 25.5% stake.
The Board of MFSL has also appointed MSI’s two nominees - Hideaki Nomura and Mitsuru Yasuda as non-executive non-independent directors on the Board of MFSL, company informed on Wednesday.
Earlier, on November 28, 2020, Max Financial Services had disclosed that it has received approval from Insurance Regulatory and Development Authority of India (IRDAI) for the proposed swap of 20.57% stake in Max Life held by MSI to MFSL in exchange for 21.87% stake in MFSL.
Commenting on the development, Mohit Talwar, MD, MFSL and Vice Chairman, Max Group, said, “We thank Mitsui Sumitomo Insurance for their long-standing partnership. I am sure they will continue to contribute richly to Max Financial through their Board participation.”
Welcoming the share swap transaction, MSI said, “We have had a long and mutually beneficial joint venture with Max. We continue to have a strong conviction in the potential of Max Financial, through its subsidiary Max Life. We believe that the anticipated Max Life-Axis JV will improve the prospects of this high-quality life insurance franchise even further.”
MFSL is listed on the National Stock Exchange and Bombay Stock Exchange. Its sole operating subsidiary Max Life is the largest non-bank owned private life insurer in India. Max Life has been at the forefront of the current buoyant phase in the Indian Life Insurance sector.
MFSL had recently announced that
Axis Bank and its subsidiaries, Axis Capital Limited & Axis Securities Limited (together Axis Entities), have entered into agreements with MFSL for acquisition of up to 19% stake in Max Life, in accordance with existing laws and regulations.
Max Life is the fourth largest private life insurer in India while Axis Bank is the third largest private bank. The two companies have had a successful business relationship for over a decade, providing long term saving and protection products to nearly 20 lakh customers. The total premium generated through this relationship has aggregated to over Rs40,000cr. Both companies have invested extensively in product and need-based sales training, thereby leading to consistent increase in productivity.
MFSL was trading at Rs637.90 per piece up by Rs0.85 or 0.13% from its previous closing on the BSE, at around 11.06am.