Shares of Max Financial Services Ltd. surged on getting the insurance regulator approval to acquire the balance 5.17% stake in Max Life Insurance Co. from Mitsui Sumitomo Insurance Co.
Max Financial is set to acquire 9.91 crore shares of Max Life Insurance for Rs 85 per piece, raising its stake to 87%.
Earlier, the company held a 72.52% stake in Max Life and Mitsui Sumitomo had 25.48% stake. In December 2020, Max Financial swapped 20.57% of the paid-up equity share capital in Max Life held by MSI to MFSL in exchange for 21.87% of issued and paid-up share capital of MFSL, the company said in its exchange filing.
“In March 2021, MSI acquired 0.26% stake from Axis Bank, as a result MSI’s stake in Max Life increased to 5.17%,” the company said. “Subsequently, MFSL was awaiting this approval from IRDAI for the transfer of balance stake of 5.17% held by MSI.”
The transaction is expected to be conclude in the next fortnight, company said.
Shares of the company gained 3.56% to Rs 688.75 apiece as of 1 p.m., while the benchmark Sensex gained 0.60%. The stock had gained as much as 5.66%, the most since July 29, earlier today. The total traded quantity is 8.8 times the 30-day average.
Of the 16 analysts tracking the company, 13 maintain ‘buy’, two suggest ‘hold’ and one recommends ‘sell’, according to Bloomberg data. The average of the 12-month consensus price target implies an upside of 34.9 %.