Free Press Journal

Max Fin shares surge over 10% on merger talks with HDFC Life



Mumbai: Shares of Max Financial Services surged over 10 per cent today after HDFC Standard Life proposed to merge Max Life and the company with itself to create an entity with assets worth over Rs 1 lakh crore.

After surging 19.99 per cent to Rs 514.40 — its upper circuit limit — on BSE, shares of the company finally ended at Rs 472.80, up 10.29 per cent.

At NSE, shares of the company jumped 10.51 per cent to close at Rs 473.85. Following the sharp rally, the company’s market valuation rose by Rs 1,179.84 crore to Rs 12,624.84 crore.

On volume front, 9.09 lakh shares of the company were traded at BSE and over 82 lakh shares changed hands at NSE during the day.

In what could be the biggest consolidation in the Indian insurance sector, HDFC Standard Life today proposed to merge Max Life and Max Financial Services with itself to create an entity with assets worth over Rs 1 lakh crore.

Boards of HDFC Standard Life Insurance Co, Max Life Insurance Company Ltd and Max Financial Services Ltd at their respective meetings held today, approved entering into a confidentiality, exclusivity and standstill agreement to evaluate a potential merger.

They will explore “a merger of Max Life and Max Financial Services into HDFC Life by way of a scheme of arrangement”, HDFC Ltd said in a statement.

The total premium of the merged entity would be nearly Rs 26,000 crore and assets under management will top Rs 1 lakh crore. In the private life insurance space, only ICICIPrudential Life Insurance had reported AUM of Rs 1 lakh crore.

Edinburgh-based Standard Life Plc holds 35 per cent stake in HDFC Life, in which HDFC owns 61.63 per cent.

Max Life is a joint venture with Mitsui Sumitomo Insurance Co. Max Financial owns 68 per cent stake in Max Life, while Mitsui Sumitomo owns 26 per cent.