New Delhi: Axis Bank on Friday announced a revised stake acquisition agreement with Max Financial.

According to the revised agreement, Axis Bank will acquire upto 9% of the equity share cap of Max Life. The bank’s subsidiaries Axis Capital Limited and Axis Securities Limited (together ‘Axis Entities’) will together acquire upto 3% of equity of Max Life. Axis Entities will have a right to acquire an additional stake of upto 7%.

The revised agreement happened as Reserve Bank of India rejected Axis Bank’s earlier proposal to directly buy 17% in Max Life.

“In response to Axis Bank’s application to the Reserve Bank of India for directly acquiring 17.002% of the equity share capital of Max Life, the Reserve Bank of India has advised Axis Bank that the application for direct acquisition of 17.002%% has not been considered. However Axis Bank has been advised to be guided by Para 5(b) of Master Direction- Reserve Bank of India (Financial Services provided by Banks) Directions, 2016 dated May 26, 2016 as updated from time to time (“Para 5(b). )”).

“In this regard, we would like to inform you that pursuant to Para 5 (b), Axis Bank and its subsidiaries, i.e. Axis Capital Limited and Axis Securities Limited (together “Axis Entities”), have agreed to enter into revised agreements with Max Financial for acquisition of upto 19.002% of the equity share capital of Max Life (“Revised Agreements”). Axis Bank’s total stake in MLI will remain within the limits stipulated under the applicable laws and regulations. Under the Revised Agreements, Axis Bank will acquire upto 9.002% of the equity share capital of Max Life, and, Axis Capital Limited and Axis Securities Limited will together acquire upto 3.000% of the share capital of Max Life. In addition, Axis Entities will have a right to acquire an additional stake of upto 7.000% of the equity share capital of Max Life,” Axis Bank said in a regulatory filing.

Axis and Max will only now send revised proposal to RBI, IRDAI, SEBI.

Axis Bank on Wednesday reported its September quarter net at 1,849 crore at a consolidated level against a loss of 18 crore in the year-ago period despite setting aside a high quantum of money for potential reverses in loans.

On a standalone level, the third largest private sector lender had a post-tax net of 1,682.67 crore as against a loss of 112.08 crore in the year-ago period.

The bank’s total income (standalone) rose marginally to 19,870.07 crore in the second quarter of 2020-21, from 19,333.57 crore in the same period last year, a BSE filing said.

During the reporting quarter, it downgraded over 4,000 crore of assets into “BB and below” taking the total quantum of such assets to over 14,800 crore, and attributed three-fourths of the additions to estimated restructuring and the rest to internal reviews.

On Friday, Axis Bank’s scrip on BSE closed 0.58% lower at 491.

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