Max Financial Services Limited (MFSL), a part of the Max Group, on Saturday said that Insurance Regulatory and Development Authority of India (IRDAI) has approved the proposal to swap Mitsui Sumitomo’s stake in Max Life Insurance with shares of the company.

Following the regulatory approval, MFSL will now proceed for the implementation of the share swap transaction, which entails swapping Mitsui Sumitomo’s 20.6 per cent stake in Max Life Insurance with 21.9 per cent stake in MFSL.

MFSL will issue and allot 7.54 crore shares of Rs 2 each at a price of Rs 565.11 per equity share on a preferential allotment basis to Mitsui Sumitomo, the company said in a regulatory filing.

The transaction will result in MFSL’s stake in Max Life increasing to 93.10 per cent. Presently, MFSL holds a 72.5 per cent stake in Max Life and Mitsui Sumitomo owns 25.5 per cent stake.

Earlier on November 19, 2020, MFSL had said that it has received approval from Department of Economic Affairs (DEA), Ministry of Finance for the aforesaid transaction and the same will be consummated upon receipt of approval from IRDAI.

Commenting on the development, Mohit Talwar, MD, Max Financial and Vice Chairman, Max Group, said, , “IRDAI’s approval is a very important milestone for the implementation of our Share Swap transaction. We will work to close the transaction as soon as possible.”

MFSL had recently announced that Axis Bank and its subsidiaries, Axis Capital Limited and Axis Securities Limited (together Axis Entities), have entered into agreements with MFSL for acquisition of upto 19 per cent stake in Max Life, in accordance with existing laws and regulations.

Max Life and Axis Bank have had a successful business relationship for over a decade, providing long term saving and protection products to nearly 20 lakh customers, MFSL said. The total premium generated through this relationship has aggregated to over Rs 40,000 crore.