Shares of Max Financial Services surged more than 10% on Thursday after Axis Bank said it would acquire an additional stake in a subsidiary of the former.

What Happened: Axis Bank’s board approved an investment of ₹1,612 crore into Max Life Insurance, which is a major subsidiary of Max Financial Services.

The move comes as part of a broader strategic collaboration between the two firms, with the aim of adding to Axis Bank’s stake in Max Life Insurance and solidify its position in the life insurance sector. Upon completion, Axis Bank’s direct stake in Max Life will rise to 16.22%, while the cumulative stake of Axis Entities will soar to 19.02%.

Axis Bank plans to execute this investment through a share subscription agreement with Max Life, subscribing to 14.25 crore fully paid-up equity shares, priced at a ₹113.06 per share. The transaction is set to be completed within four to six months.

Price Action: Max Financial’s share price skyrocketed 11.44% to ₹880.05 in morning trade on Thursday. However, Axis Bank shares dropped 0.37% to ₹946.50.