Axis Bank announced that it would acquire an additional 6.23% stake in Max Life Insurance for a total consideration of Rs 1,612 crore or $194.6 million through a preferential allotment of shares. 

The private lender will enter into a share subscription agreement to acquire around 14.25 crore shares of Max Life on a preferential basis at a fair market value of Rs 113.06, determined by the discounted cash flow (DCF) methodology. 

Post the subscription, Axis Bank will hold a direct stake of 16.22% in the life insurer. The transaction is expected to be completed within 4-6 months.

The Reserve Bank of India (RBI) has approved the proposed acquisition. However, the bank still requires approval from other regulators, including the Insurance Regulatory and Development Authority (IRDAI), the Pension Fund Regulatory and Development Authority (PFRDA), and the Competition Commission of India (CCI).

Axis Bank and its subsidiaries, Axis Securities and Axis Capital, acquired a 12.99% stake in Max Life in 2021. After this deal, the collective stake of Axis Entities will increase to 19.02% in Max Life Insurance.

Max Life Insurance is a subsidiary of Max Financial Services. The latter’s shares settled the trading day at Rs 852, 7.89% higher than the previous closing price at the National Stock Exchange (NSE).