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Max Financial Services: Company worth ₹24,000 crore running with only 12 employees

As <a href="http://www.businessinsider.in/Max-Life-Max-Financial-Services-HDFC-Standard-Life/articleshow/52793638.cms">reported</a>, Max Life Insurance and Max Financial Services will now be a part of <keyword id="472962" type="ORGANIZATION" weightage="100" keywordseo="HDFC-Life">HDFC Life</keyword>, thanks to a two-stage merger. As per sources, this merger will facilitate automatic listing of HDFC Life on the <keyword id="458987" type="UNKNOWN" weightage="100" keywordseo="Indian-bourses">Indian bourses</keyword> with a market capitalisation of about Rs 45,000 crore to Rs 50,000 crore, thus making it the largest pureplay listed life insurance player of the country. 
 In the final entity after the merger, HDFC group, including HDFC, Standard Life and <keyword id="6419840" type="PERSON" weightage="100" keywordseo="Azim-Premji">Azim Premji</keyword>, will have about 60-65% stake, while the Max group, under <keyword id="10338" type="PERSON" weightage="100" keywordseo="Analjit-Singh">Analjit Singh</keyword>’s leadership, will have 35-40% ownership, to be distributed among Singh family, Japanese financial behemoth Mitsui Sumitomo Insurance (MSI), a member of MS&amp;AD Insurance Group, Goldman Sachs, KKR and general public. 
 
After the report of this merger, shares in Max Financial Service touched the upper circuit of Rs 514 and closed at Rs 473. 
 
As of now, Max Financial Services, a pureplay holding company for Max Life Insurance, finds place on on the Indian bourses, for which Analjit Singh had completed a three-way split of Max India last financial year. After demerger, Singh had sold 9.5% in Max Financial Service to KKR, the US-based private equity firm, in a deal of about Rs 1,000 crore worth. 
 The deal announced today would have Max Life Insurance (MLI) merging with its parent company Max Financial Services (<keyword id="346739" type="ORGANIZATION" weightage="100" keywordseo="MFSL">MFSL</keyword>), which currently owns 68.01% stake, while the Japanese partner MSI owns 25% and Axix Bank holds another 5.99%; the remaining 1% stake while key employees of MSI. 
 
After this, the final merged entity will be combined with HDFC Life Insurance. "Given the current discussion, in the merged entity HDFC Life - MAX Life, the HDFC group will have about 65% stake and Max Group will have about 35% stake," a person involved in the deal told <a href="http://economictimes.indiatimes.com/markets/stocks/news/merger-with-max-life-to-facilitate-automatic-listing-of-hdfc-life/articleshow/52795023.cms">ET</a>. 
 
After this merger, HDFC Life Insurance will automatically get listed at about Rs 50,000 crore, helping HDFC raise funds by diluting its stake in the insurance firm though stock exchanges. This would also allow some of the marquee investors, who had invested in MFSL a few years back, to exit as and when they want.

Merger with Max Life will automatically list HDFC Life on Indian bourses

Mumbai, Apr 28 () Private sector lender Axis Bank on Tuesday formally joined peers to have a life insurance joint venture by announcing to raise its stake in Max Life Insurance, the fourth largest player in the life cover space, to 30 per cent for Rs 1,592 crore. The deal, which comes during bleak economic times as the country grapples with the impact of COVID-19 pandemic, was struck due to the opportunity in the life insurance space and also the price at which it could be sealed, Axis Bank's managing director and chief executive Amitabh Chaudhry said. Other large lenders, including HDFC Bank, ICICI Bank and SBI, and also smaller ones have life insurance joint ventures or have promoted companies themselves. According to experts, banks originate a lot of insurance business and "manufacturing" products is more rewarding than merely selling them. India's third largest private sector lender Axis Bank, which already has a minor 1 per cent ownership of the insurer, used to sell Max's policies for over a decade, which has seen 19 lakh customers and over Rs 38,000 crore in premium generated, Chaudhry said. A senior Axis Bank official said the deal includes picking up over 55 crore shares of the insurer at Rs 28.61 per unit, which takes the total deal consideration to Rs 1,592 crore, and underlined that the final figure may wary a bit depending on the date of deal closure. The deal requires nods from the Reserve Bank, Insurance Regulatory and Development Authority and Competition Commission of India, and will take up to six to nine months to consummate. When asked about the timing of the deal, Chaudhry defended the move pointing out to the "big opportunity" that is presented by the life insurance sector and the potential for the upside on the investment presented by the price at which it is signed. It can be noted that the Reserve Bank is pushing lenders not to declare dividends to conserve capital and deploy it for fresh lending, which will be necessary to kickstart the economy once the lockdown ends. Chaudhry said the Max stake buy will dent its overall capital adequacy, which stood at a comfortable level of over 17 per cent, by only 0.10 per cent. Max Life Insurance is a part of the listed Max Financial Services Ltd (MFSL), a diversified financial services company. In a regulatory filing, Max said that the consideration payable by Axis Bank for purchase of the shares shall be arrived basis the valuation of Max Life conducted as per Rule 11UA read with Rule 11UAA of the Income-tax Rules, 1962. Upon the closing of the deal, MFSL will have the right to nominate four directors on the Max Life board, while Axis Bank will have the right to nominate three directors. One nominee director of the promoter group on the board of MFSL shall be a person identified by Axis Bank. Chaudhry denied speculation about the stake being raised in the future by the bank, including murmurs of a complete takeover, saying there are no such plans. At present, products sold through the bank reportedly contribute for 54 per cent of Max Life's revenues. On February 20, a tri-party agreement was signed between Axis, MFSL and Max Life to explore the possibility of a long-term strategic partnership between Axis Bank and Max Life. At present, MFSL holds 72.5 per cent stake in Max Life and Japan-based Mitsui Sumitomo Insurance (MSI) owns 25.5 per cent stake. The proposed transaction with Axis Bank follows the ongoing swapping by MSI of 20.6 per cent stake that it holds in Max Life with a 21.9 per cent stake in MFSL, an official statement said. "MFSL also plans to purchase MSI's balance stake in Max Life. Post completion of the series of transactions, Max Life will become a 70:30 joint venture between MFSL and Axis Bank," it explained. Against the 30 per cent stake, Axis Bank's name will be included in Max Life's tag line. It is to be noted that Max Life had made an attempt to merge with HDFC Life in 2017 which failed as they did not receive regulatory approval due to reported complexity of the deal. Interestingly, the deal was then brokered by the then HDFC Life CEO Amitabh Chaudhry who is now the CEO of Axis Bank. Following failure of the deal, Max Group made several attempts to sell part of its stake. However, it did not meet success. MFSL shares gained 5.14 per cent to close at Rs 475.80 apiece on the BSE, while Axis Bank stock surged 6.61 per cent to close at 455.55 per unit, as against gains of 1.17 per cent on the benchmark. AA DP MKJ

Axis Bank to buy 29% stake in Max Life for Rs 1,592 crore

New Delhi, May 13 () Max Financial Services Ltd (MFSL) on Wednesday said it has settled a tax dispute involving over Rs 123 crore under the government's 'Direct Tax Vivad Se Vishwas' scheme.The company claimed that it has become the first large company in the private sector to settle a tax dispute under the scheme.MFSL settled a long-pending income tax case under the dispute resolution scheme 'Direct Tax Vivad Se Vishwas, 2020,' recently launched by the government, the company said in a release."MFS has paid Rs 123.78 crore for settling the litigation involving capital gains from the stake sale of its erstwhile telecom joint venture Hutchison Max Telecom Ltd," it said. The settlement was finalized with the Jalandhar jurisdiction of I-T earlier this month and due taxes have been remitted, it added.The government had announced the 'Vivad se Vishwas' scheme in the union budget for 2020-21. Under the scheme, taxpayers whose tax demands are locked in dispute in multiple forums can pay due taxes by June 30, 2020 and get a complete waiver of interest and penalty."The payment also clears a tax dues contingent liability that has been reported on the company's books for the past two decades," it added.MFSL is the holding company of India's fourth-largest life insurer Max Life. KPM MR

Max Financial Services settles Rs 123 cr tax dispute under Vivad se Vishwas scheme

New Delhi, Feb 5 () Max Financial Services on Wednesday reported a 56 per cent decline in standalone net profit at Rs 61.60 crore for the third quarter ended December 31, 2019. The company's net profit had stood at Rs 139.89 crore in the year-ago quarter. Its total income during the latest quarter also slipped to Rs 80.19 crore as against Rs 176.57 crore in the year-ago quarter, the company said in a regulatory filing. Max Financial Services Ltd (MFSL) is the parent company of Max Life. MFSL actively manages a majority stake in Max Life Insurance Company Ltd, making it India's first listed company focused exclusively on life insurance. DP HRS

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Max Financial Services: Company worth ₹24,000 crore running with only 12 employees

Eetika Kapoor

Merger with Max Life will automatically list HDFC Life on Indian bourses

BI India Bureau

Axis Bank to buy 29% stake in Max Life for Rs 1,592 crore

PTI

Max Financial Services settles Rs 123 cr tax dispute under Vivad se Vishwas scheme

PTI

Max Financial Services Q3 profit slips 56 pc to Rs 62 cr

PTI

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