Axis may purchase 5% in Max New York Life

Axis Bank, the country’s third largest private sector lender, is in talks to buy a 5(%) per cent venture in Max New York Life Insurance for approximately Rs 200 crore.
This would value Max New York Life at shut to Rs 4,000 crore. It is getting into a banc assurance arrangement with Axis, through which the company’s insurance policies would be sold during the bank’s branches from May.
When asked, a representative for Axis said, “We do not have any comments to propose on the specifics of our strategic business initiatives.” Max’s representative refused to comment.
Max was among the first players to enter the life insurance arena when the sector was opened in 2000 and was ranked eighth in terms of total premium income in the period between April 2009 and February 2010. It had a market share of 1.9(%) per cent.
The deal comes within months of Hemendra Kothari, the former chairman of DSP Merrill Lynch, acquiring Ambuja Cements’ 11.5(%) per cent stake in ING Vysya Life Insurance for Rs 190 crore. The deal had valued the company at Rs1, 650 crore.
The Anil Dhirubhai Ambani Group is looking to shed venture through a mix of private placement and public offer in its life insurance venture, Reliance Life Insurance, to step up the increase of the business.
Sources said Axis zeroed in on a stake in Max New York Life after looking around for other opportunities. The deal had been in the works for a while but both the bank as well as the insurer without the development when Business Standard sought comments earlier.
In October last year, Axis’ Managing Director and CEO Shikha Sharma had told Business Standard the bank was not keen on manufacturing insurance products. She was the MD & CEO of the country’s largest private sector life insurer, ICICI Prudential Life Insurance Company, before she joined Axis last July.
Sharma, however, appeared keener on foraying into health insurance, which she had said was a “more open area”. Max India-promoted health insurance company Max Bupa is set to formally launch operations next month.