Axis Bank receives Sebi notice to buy stake in Max Life Insurance

Capital market regulator Securities and Exchange Board of India has issued show-cause notices to Axis Bank and its subsidiaries in a case related to stake purchase in Max Life Insurance.

In a regulatory filing, Axis Bank said the SCN was issued on October 25 via email.

Axis Bank and its subsidiaries Axis Securities Limited and Axis Capital Limited have received the SCN via email from Sebi, it said.

The SCN is under review and will forward responses to the SCN to Sebi as the said transactions have been completed with requisite regulatory approvals, it said.

Meanwhile, Max Financial Services Limited, the holding company of Max Life Insurance, also said that several directors and several key management employees of the company (in each case “both past and present”) have received the SCN via email from Sebi.

Earlier this year, the board of directors of Axis Bank approved the proposal to acquire shares of Max Life, increasing the total stake of Axis companies in the insurance firm from 19.02 percent to 19.99 percent.

The Insurance Regulatory and Development Authority of India (IRDAI) has allowed Axis Bank and its two subsidiaries – Axis Capital Ltd and Axis Securities Ltd – to collectively own about 20 per cent of Max Life Insurance.

The stake was acquired through a deal entered into in 2021 between Axis Bank and Max Life Insurance.

Last year, Axis Bank 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 of the agreement is in line with the IRDAI guidelines issued in October 2022.