The Insurance Regulatory and Development Authority of India (IRDAI) has approved the acquisition of up to a 12 per cent stake in Max Life Insurance by Axis Bank and its subsidiaries Axis Capital and Axis Securities.

This was disclosed by Max Financial Services Ltd (MFSL) in a regulatory filing on Wednesday.

According to the proposed transaction, the Axis entities have the right to acquire up to 19 per cent stake in Max Life of which Axis Bank proposes to acquire up to 9 per cent.

Axis Capital and Axis Securities together propose to acquire up to 3 per cent of the share capital of Max Life in the first leg of the transaction, a statement disclosed.

Axis entities have the right to acquire an additional stake of up to 7 per cent in Max Life, in one or more tranches, which they intend to acquire over the course of the next few years, it added.

The IRDAI approval was an integral step in this long-awaited joint venture transaction which was first announced in April 2020.

“We have been looking forward to bringing Axis Bank in this construct as a joint venture partner in Max Life. Our long and successful business association with them has demonstrated to us their value across customer insights, distribution expertise and other functional benefits which will be highly useful for the business,” said Analjit Singh, chairman of Max Group and Max Financial Services.

Max Life is the fourth largest private life insurer in the country while Axis Bank is the third largest private bank. The two firms have shared a successful business relationship for over a decade, providing long-term saving and protection products to nearly 20 lakh customers. The total premium generated through this relationship aggregated to over Rs 40,000 crore.

"We hope we will be able to make quick progress in harnessing the synergies and benefits from this joint venture between Max Life and Axis Entities," MFSL Managing Director Mohit Talwar said while commenting on the development.