Axis Bank enters into revised pact with Max Fin Serv

Axis Bank on Tuesday said it has entered into a revised agreement with Max Financial Services to acquire an additional 7 per cent stake in Max Life Insurance at fair market value using discounted cash flow method. The revision in agreement follows the guidance issued by the Insurance Regulatory and Development Authority (IRDAI) in October last year.

Axis Bank and its subsidiaries Axis Securities and Axis Capital had in 2021 entered into definitive agreements with Max Financial Services Ltd for acquiring 20 per cent stake in its subsidiary Max Life Insurance Co Ltd. Following this, Axis Entities had collectively acquired 12.99 per cent of the equity share capital of Max Life.

In a regulatory filing on Tuesday, Axis Bank said Axis Entities have entered into revised agreements with Max Financial NSE 4.52 % on January 9, 2023.

As per the revised agreement, “the valuation for the right to acquire the balance 7 per cent equity stake of Max Life would be at fair market value using discounted cash flows instead of valuation as per Rule 11UA of the Income Tax Rules, 1962.”

The revision, the stock exchange filing said, has been done consequent to the guidance received by Max Life from insurance regulator IRDAI.

Discounted cash flow refers to the estimated value of an investment based on future cash flows.