With the Indian economy slowly entering into the phase of economic recovery, mergers and acquisitions are taking place every day. Privatization of Banking Institutions has gained significant traction during this time. With private sector banks like Bank of India and Indian Overseas Bank attempting to liquidate stakes, the banking and investment environment is locked in to undergo a sea change in organization and functioning. Axis Bank is the leading private sector across the country. It has received regulatory approval from the IRDAI to merge with Max Financials Limited.
The shares of Max Life Insurance and Max Financials combined have recently surged to an unprecedented degree. The news was that Axis Bank was going to increase its stake in Max Financials with a 21% overall stake in the functioning of the insurance regulator and 3 board member seats. With 9% of the stake coming through capital acquisition, 3% stake would come through subsidiaries. The rest of the stake would be infused directly through the process of capital infusion. With the emergence of the news, Max Life Insurance and Max Financials Limited has reported stellar numbers for the December Quarter. Rating and Analysis Agencies pile Jefferies has predicted that the growth in the business value of the firm would be close to 65%/ with an increase in margins ratio to 28.6%. It notices that there are has been a hike of 15% in the growth of the corporate firm. Axis Bank contributes to about 60% of the total business operations that take place in Max Financials Limited thereby solidifying the move and garnering more business growth for the financial institutions.
Investors are hoping that the merger with Axis Bank would significantly reduce preliminary expenditures and would generate exponential business growth for the enterprise.