Axis Bank to buy nearly 10% stake in Go Digit Life Insurance
Premium- The company proposes to carry out life insurance business in India, subject to grant of certificate of registration by Insurance Regulatory and Development Authority of India
Axis Bank, the country's third biggest private lender, has signed a non-binding term sheet to invest an amount between ₹49.9-69.9 crore in Go Digit Life Insurance for 9.94% stake in two tranches, as the private lender seeks to tap a fast-growing insurance market.
This underscores private lenders' growing interest in India's lucrative and largely untapped insurance sector. Private lender HDFC Bank has also announced plans to buy a 9.94% stake in Go Digit Life last month.
"...Axis Bank Limited (“Bank") has entered into an indicative and non-binding term sheet with Go Digit Life Insurance Limited (“Company") for a proposed investment, by Axis Bank in the Company, of an amount between Rs. 49.90 crores to Rs. 69.90 crores, in two tranches, by subscribing to equity shares of the company, for an equity stake of up to 9.94% of the paid-up equity share capital of the company, subject to execution of definitive agreements whose terms and conditions are to be mutually agreed upon, and fulfilment of other terms and conditions," the bank said in a regulatory filing.
The company proposes to carry out life insurance business in India, subject to grant of certificate of registration by Insurance Regulatory and Development Authority of India.
Digit, which already has a presence in the general insurance business, is foraying into the life insurance segment with its Go Digit Life venture but has not yet received a licence for the unit.
Go Digit's IPO put in ‘abeyance’ by Sebi
Go Digit General Insurance, Digit's general insurance business backed by Canadian billionaire Prem Watsa's Fairfax Group, had its planned initial public offering put on hold this month.
Without disclosing the reason, Securities and Exchange Board of India (Sebi) said in a public disclosure on its website on Monday that the “issuance of observations (has been) kept in abeyance" with regard to the IPO of Go Digit. The information was updated on 16 September.
GoDigit General Insurance had filed draft papers for the IPO with the regulator on 17 August.
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“Issuance of observations" by Sebi implies its go-ahead for an IPO. The regulator usually gives its observations on IPO papers in 30 days.
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