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Deal Closed | Axis Bank Limited | Proposed Investment into Fettle Tone LLP

Khaitan & Co advised Axis Bank Limited on all legal aspects of the transaction.

The details of the deal are as follows:

Sector: Financial Services, Insurance 

Axis Bank acquires 9.90% partnership interest in Fettle Tone LLP

Announcement Date: 13-Mar-2021 

Completion Date: 17-Mar-2021 

Name of Client: Axis Bank Limited 

Investor Details: Axis Bank Limited | India  

Axis Bank Limited is one of the leading private sector banks of India offering a wide range of products and services to corporate and retail customers through a variety of delivery channels. Its primary business consists of commercial banking operations for Indian corporate and retail customers. It provides a range of commercial banking products and services including loan products fee and commission‑based products and services deposit products and foreign exchange and derivatives products to India’s leading corporations mid‑market companies and small and medium enterprises. Its retail operations primarily consist of retail lending and deposit-taking and distribution of third‑party insurance and investment products. It also offers agricultural and rural banking products. Its shares are listed on NSE and BSE. 

Investee Details: Fettle Tone LLP | India 

Fettle Tone LLP is a special purpose vehicle (SPV) set up by True North Fund VI LLP (i.e., the majority partner of Fettle Tone LLP) under the IRDAI (Investment by Private Equity Funds in Indian Insurance Companies) Guidelines 2017.   

Fettle Tone LLP is currently a promoter of Max Bupa Health Insurance Company Limited and holds ~55.6% of the total share capital of Max Bupa Health Insurance Company Limited. Max Bupa Health Insurance Company Limited is a standalone health insurance company registered with the Insurance Regulatory and Development Authority of India. 

Deal Description: Advised Axis Bank Limited on its acquisition of 9.90% partnership interest in Fettle Tone LLP pursuant to a contribution (in cash) by Axis Bank Limited in the partnership capital of Fettle Tone LLP. Fettle Tone LLP currently holds approximately 55.6% of Max Bupa Health Insurance Company Limited and Axis Bank Limited's contribution in Fettle Tone LLP has resulted in Axis Bank Limited's indirect acquisition of an approximately 5.5% indirect stake in Max Bupa Health Insurance Company Limited. 

Total Consideration: INR 90.80 crores (USD 12.70 Millions)

Team Members:: The core transaction team consisted of Niren Patel (Partner) and Saswat Subasit (Principal Associate) with assistance from the following:  

Corporate/transactional aspects: Yashashree Mahajan (Senior Associate);  

Due diligence aspects: Yashashree Mahajan (Senior Associate), Ruturaj Jere (Associate), Agranee Kapoor (Associate), Ravali Rayaprolu (Associate), Jasleen Kaur Dua (Associate), Saranya Mishra (Associate), Zico Bahl (Associate) and Utsav Mitra (Associate); and 

Competition aspects: Rahul Singh (Partner), Radhika Seth (Senior Associate), Alisha Mehra (Associate) and Mayuka Sah (Associate) 

Role of Firm: Khaitan & Co advised Axis Bank Limited on all legal aspects of the transaction including (A) structuring the transaction from an RBI and IRDAI perspective; (B) drafting, negotiating, and finalizing the transaction documents (including the main LLP agreement); and (C) conducting a limited legal due diligence on Max Bupa Health Insurance Company Limited and a legal due diligence on Fettle Tone LLP. 

Other legal advisors if any: Pioneer Legal, Mumbai represented True North Fund VI LLP and Fettle Tone LLP.  

Unique Feature of Transaction: The deal required complex and pragmatic solutions to various complex issues arising in connection with the transaction, mainly with respect to the structuring of indirect investment into an insurance company through an LLP and from the perspective of compliance with applicable RBI and IRDAI regulations. The structuring aspects also needed to take into account Axis Bank Limited's indirect acquisition of an indirect stake in Max Bupa Health Insurance Company Limited pursuant to its contribution in Fettle Tone LLP's partnership capital. 




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