Axis Bank Ltd.

Axis Bank has acquired a 4% stake in Max New York Life Insurance Company for Rs.72 crore. The private insurer has received all regulatory clearances for diluting its stake. Max New York Life Insurance is a joint venture between Analjit Singh’s Max India and US based New York Life International. Max India had 74% stake in the insurer while New York Life had 26%. After the deal, Max India’s stake is at 70%.

The deal has received approvals from the Insurance Regulatory and Development Authority (Irda) and the Reserve Bank of India (RBI). Axis Bank has picked up the stake at par value and has entered into a 10-year strategic tieup. Axis Bank said has received regulatory nod for the investment.

Max New York Life has a share base of 180 crore with a paid-up capital worth Rs.1,976 crore as on end-March. The company reported a net profit of Rs. 283 crore for the financial year 2010-11 compared with Rs. 24 crore in the previous year. 

The deal will strengthen the distribution network for Max New York Life and boost fee income for Axis Bank. Axis Bank does not have an insurance subsidiary. Axis Bank’s fee income rose 30% year-on-year to 3,790 crore in 2010-11 while Max New York Life’s new business income from bancassurance increased to 25% in 2010-11 from less than 5% a year earlier.crackcrack