MUMBAI: HDFC Life Insurance Co Ltd and Max Life Insurance Co Ltd have carved out a new structure for their proposed merger after the Insurance Regulatory and Development Authority of India rejected the original threestep union, said two people with knowledge of the discussions.
The two companies have decided to extend the deadline for completing the merger, they said, declining to be identified citing the sensitivity of the discussions. Meanwhile, HDFC Life has also informally asked its bankers to start preparing for an initial public offering.
The deadline for the original merger plan expires on June 30. HDFC Life and Max spokespersons did not respond to emails seeking comment.
The first step of the original plan involved the merger of Max Life with Max Financial Services. However, Section 35 of the Insurance Act prohibits the merger of an insurance company with a non-insurance company. The new structure is much simpler, the people cited above said.
“The new structure is something that satisfies Section 35 of the insurance norms, is in compliance with Sebi rules and in accordance with existing taxation norms. We can’t share anything more at this stage. Once a decision on the merger (under the new structure) is taken, we will inform the exchanges and will be in a better position to explain the new route planned for the merger,” said the first of the two people cited earlier.