Axis Bank’s stake purchase would value the startup’s upcoming life insurance business at $90 million. Axis currently offers some insurance products in partnership with Max Financial.

Mumbai:

Indian private lender Axis Bank Ltd said on Tuesday it has signed a non-binding term sheet to invest Rs 49.9-Rs 69.9 crore for a 9.94% stake in Go Digit Life Insurance.

HDFC Bank on August 25 had announced it will invest Rs 49.9 crore to Rs 69.9 crore in Go Digit Life Insurance in two tranches to acquire up to a 9.94 percent equity stake in the company.

The development underscores private lenders’ growing interest in India’s lucrative and largely untapped insurance sector. The country’s biggest private lender

Digit, which already has a presence in the general insurance business, is foraying into the life insurance segment with its Go Digit Life venture but has not yet received a licence for the unit.

Reuters had reported in August that Axis Bank’s stake purchase would value the startup’s upcoming life insurance business at $90 million. Axis currently offers some insurance products in partnership with Max Financial.

Go Digit General Insurance, Digit’s general insurance business backed by Canadian billionaire Prem Watsa’s Fairfax Group, had its planned initial public offering put on hold this month.

The private lender stated that it has entered into “an indicative and non-binding term sheet with Go Digit Life Insurance.”

The insurance company proposes to carry out life insurance business in India, subject to the grant of a certificate of registration by the Insurance Regulatory and Development Authority of India (IRDAI), HDFC Bank said in a statement.