Axis Bank, the country’s third-largest private sector bank, will acquire upto 9.94 per cent stake in Fairfax-backed Go Digit Life Insurance through an investment of about ₹50-70 crore.

The proposed investment will be made in two tranches, Axis Bank said in a filing with stock exchanges. 

Already Axis Bank is a promoter of Max Life Insurance Company. This private sector lender along with its two subsidiaries Axis Capital and Axis Securities own a 12.99 per cent stake in Max Life Insurance. Axis Bank plans to raise the stake to about 20 per cent in the near future. 

Axis Bank’s stake buy in Go Digit Life Insurance is subject to execution of definitive agreements whose terms and conditions are to be mutually agreed upon alongside fulfilment of other conditions. “The company proposes to carry out life insurance business in India, subject to the grant of certificate of registration by Insurance Regulatory and Development Authority of India,” Axis Bank’s filing said.

India’s life insurance market — which remains largely untapped —is currently the world’s tenth biggest and is expected to grow to the fifth position by 2032. Life insurance penetration — the country’s life insurance premium as a percentage of GDP— grew to 3.2 per cent in March 2021, marginally up from 2.15 per cent two decades ago, IRDAI data showed.

Startup Digit is already into general insurance business through Go Digit General Insurance, which had put on hold this month its planned initial public offering following the market regulator SEBI keeping “in abeyance” its proposal.

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