Analyst Concall
Approvals for Max Fincl-Axis Max Life merger may take 1 yr
This story was originally published at 11:12 IST on 5 February 2025
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--Max Fincl: Regulators, NCLT may take 1 yr to approve Axis Max Life merger
--CONTEXT: Comments by Max Financial's mgmt in post-earnings analyst concall
By Shubham Rana and Gowri Lakshmi
NEW DELHI/MUMBAI – The merger of Max Financial Services Ltd. with its subsidiary Axis Max Life Insurance Ltd. may take up to one year to get approval from regulators and the National Company Law Tribunal, Max Financial's management said in a post-earnings analyst concall on Wednesday.
The board of Axis Max Life Tuesday approved a road map to list the insurer on bourses. As per the listing road map, Max Financial Services will merge into Axis Max Life. Max Financial holds nearly 81% stake in Axis Max Life, and the rest is held by Axis Bank.
Max Financial's management is hopeful that the proposed Insurance Amendment Bill, which will be presented in Parliament in the ongoing Budget session, will also facilitate the merger into Axis Max Life. "As soon as the bill gets approved, we will go ahead and file it with the regulator," the management said. "Hopefully, the regulatory approval process will be shortened from the guidelines coming from the Act, however, the overall process of going to NCLT seeking approval will take about one year."
Max Financial Tuesday reported a net profit of INR 560.4 million for the quarter ended December, down 62% on year and 50% on quarter. At 1012 IST, shares of the company were trading 3.2% higher at INR 1,135.75 on the National Stock Exchange of India Ltd.
Axis Max Life's Managing Director and Chief Executive Officer Prashant Tripathy said that the insurer has contained the impact of the Insurance Regulatory and Development Authority of India's surrender value norms at around 100 basis points, as against the 100-200 bps previously expected.
IRDAI in December 2023 issued a master circular asking insurance companies to increase the surrender value of life insurance policies, specifically for non-participating products. Surrender value is the total payout given by insurance companies when a policyholder exits the policy before maturity. These guidelines came into effect from Oct. 1. End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Deepshikha Bhardwaj
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