Shares of Max Financial Services (MFSL) rallied 5.6% to Rs 702 in Monday’s intraday trade after the company announced that it has received approval from the Insurance Regulatory and Development Authority of India (IRDAI) to purchase the balance 5.17% stake held by Mitsui Sumitomo (MSI) in Max Life Insurance.
MFSL will purchase MSI’s balance 5.17% Max Life stake at Rs 85 per share. The transaction is expected to be concluded in the next fortnight.
Earlier, MFSL held a 72.52% stake in Max Life and MSI had a 25.48% stake. In December 2020, MFSL swapped 20.57% of the paid-up equity share capital in Max Life held by MSI to MFSL in exchange for 21.87% of the issued and paid-up share capital of MFSL (Share Swap Transaction).
In March 2021, MSI acquired a 0.26% stake from Axis Bank, as a result, MSI’s stake in Max Life increased to 5.17%. Subsequently, MFSL was awaiting this approval from IRDAI for the transfer of the balance stake of 5.17% held by MSI. Post completion of MSI balance stake buyout of 5.17% MFSL’s shareholding in Max Life will increase to 87%.
At 11.01, the scrip was trading 3.5% higher at Rs 688 per share. However, the stock has fallen nearly 10% in the last six months, while it has plunged 32% year-to-date.
As per Trendlyne data, the highest target for stock goes up to Rs 1,200, while the average estimate of Rs 960, shows an upside of the potential of around 38% from the current prices. Out of the 14 analysts covering the stock, 12 of them have buy ratings.
Source: Economic Times