Axis Bank gains 2% on CCI nod to ₹1,612-crore stake acquisition in Max Life Insurance

Axis Bank Ltd shares gained more than 2% on Wednesday, April 3, following a favourable order from the Competition Commission of India on the proposed acquisition of an additional stake in Max Life Insurance Company Ltd.

The fair trade regulator in India has given a go ahead to Axis Bank for acquiring an additional 6% stake in the private insurance firm Max Life Insurance.

CCI, on Tuesday, April 2, approved the subscription of 14,25,79,161 equity shares of Max Life Insurance Company by Axis Bank.

Last year, on August 9, 2023, Axis Bank and its subsidiaries announced to acquire the remaining stake in Max Life Insurance, stating that it had received a go ahead for the infusion of ₹1,612 crore in the life insurer through a preferential allotment route from the Acquisitions, Divestments and Merger Committee.

This would increase Axis Bank’s direct stake in Max Life to 16.22%, along with the collective stake of Axis Entities to 19.02%, the private sector lender noted in August.

The capital infusion in the private insurer through issuing 14.25 crore of its equity shares by Axis Bank, would enable the company (Max Life) in supporting its future growth ambitions, while augmenting its capital position as well as improve solvency margins.

Any deal beyond a particular threshold, requires an approval or go-ahead from the country's fair trade regulator, CCI, as the body keeps a tab on unfair business practices.

Axis Bank’s shares closed 1.32% higher at ₹1,061 per piece on the National Stock Exchange (NSE).

The banking stock has dipped a little over 3% so far this year, but has managed to give its investors healthy double-digit returns of almost 25% over a one year period.