Since last year, Max India Life Insurance has been working hard on its planned merger with HDFC Life for its insurance business. HDFC Life is India’s top mortgage-financier company and it recently announced to sell its shares in an Initial Public Offering (IPO). Max is now hoping to come up with a new workable plan in the coming 12 days.
Max is working on a new structure for the merger and is hopeful that the merger will go through. HDFC, on the other hand, announced its IPO on Monday and said, that no structure given before the launch of the IPO would be approved by the shareholders.
Last year in August, Max Life and HDFC Life had proposed a merger in four stages. In the first stage, Max Financial Services had to be merged with Max Life. Post this merger, the life insurance business had to be demerged, and then the merger with HDFC Life would happen subsequently. IRDAI had objected to this plan because as per the Section 35 of the Insurance Act, an insurer cannot merge with a non-banking financial company.
The deadline for the merger has already been extended twice. First the deadline was extended to June and the again to July 2017.