On Tuesday, shares of Max Financial Services rose nearly 15 percent to a new 52-week high of Rs 628.90 on NSE after the company on the previous day said that Axis Bank has reduced the size of its planned stake purchase from 29 percent to 17 percent.
Axis Bank had initially planned to raise its stake in the insurer to 30 percent for about Rs 1,590 crore.
"Axis Bank now proposes to acquire 17.002 per cent of the equity share capital of Max Life, resulting in total ownership of 18 per cent post the transaction. The parties have executed the definitive agreements. Axis Bank and Max Life will shortly approach the respective regulatory authorities, with revised applications for their consideration and approval. The transaction is subject to regulatory approvals," Max Financial said in an exchange filing.
Brokerages have raised their target on the stock after the news.
CLSA upgraded the stock to "buy" and has raised the target to Rs 720 from Rs 640 per share. The brokerage firm is of the view that the deal revision reduces the uncertainty of a long-term distribution tie-up. Emkay Global also gave a buy rating to the stock with a target price of Rs 660.
ICICI Direct also has a buy rating on the stock with a target price of Rs 650.