Axis Bank, the country’s third largest private sector bank, will acquire up to 9.94 per cent stake in Fairfax-backed Go Digit Life Insurance through an investment of around ₹50-70 crore.
The proposed investment will be made in two phases, Axis Bank said in a stock market filing.
Axis Bank is already the promoter of Max Life Insurance Company. This private sector lender along with its two subsidiaries Axis Capital and Axis Securities own 12.99 percent stake in Max Life Insurance. Axis Bank plans to increase the stake to around 20 percent in the near future.
Axis Bank’s purchase of shares in Go Digit Life Insurance is subject to the execution of a specific agreement whose terms and conditions will be agreed upon and other conditions fulfilled. “The company proposes to carry on life insurance business in India, subject to the grant of a certificate of registration by the Insurance Regulatory and Development Authority of India,” Axis Bank’s filing said.
India’s life insurance market – which is largely untapped – is currently the tenth largest in the world and is expected to grow to the fifth position by 2032. Life insurance penetration – the country’s life insurance premiums as a percentage of GDP Nation – grew 3.2 percent in March. 2021, slightly increased from 2.15 percent two decades ago, IRDAI data showed.
Startup Digit is already in the general insurance business through Go Digit General Insurance, which had this month called off its planned initial public offering following market regulator SEBI’s “blocking” of its proposal.