Axis Bank to buy 4 per cent stake in Max India Life
31 Mar 2010
Max India Ltd said on Tuesday its board has approved allotting about 4 per cent stake in Max New York Life Insurance Co Ltd to private lender Axis Bank for an undisclosed amount.
Max New York Life Insurance Co is a 74:26 joint venture between Max India and New York Life International LLC.
The tie-up, which will last for 10 years, will allow Axis Bank to distribute Max India Life's insurance products across the country from 1 May. In a statement to the stock exchanges, Max India said, ''The board of directors of the company approved in-principle, the proposal of Max New York Life Insurance (MNYL) ... to issue equity shares of approximately 4 per cent of MNYL to Axis Bank, the terms of which are currently under finalisation."
Axis bank executive director and chief financial officer S Sengupta said recently that a stake, even a small one, will indicate a strong relationship between Axis Bank and Max New York Life, besides creating value for the bank.
The proposal for the corporate agency tie-up and share sale is subject to regulatory approvals.
Max New York Life said in a statement that further details on the proposed stake sale would be shared at an appropriate time."This move of equity participation by Axis Bank will help build a deeper relationship between the two organisations, beyond just a distribution arrangement," Max New York Life chief executive and managing director Rajesh Sud said.
On the corporate agency tie-up with Axis Bank, Sud said, "Max New York Life has built a multi-channel distribution capability with agency at its core. We believe that bankassurance has a critical role to play in distributing our products to our chosen customer segments."