According to media reports, Axis Bank is looking to increase its stake in Max Life from the existing 2% to 20%. The elation among the company's investors was evident from the 9% surge in Max Financial's shares on Thursday.

Axis Bank, Max Financial Services Limited (MFS) and its subsidiary Max Life Insurance Company (Max Life) on February 20 signed a confidentiality and exclusivity arrangement to explore the possibility of Axis Bank entering into a long-term strategic partnership with Max Life.

"Max Financial Services and Axis Sank have entered into a confidentiality and exclusivity arrangement to explore a long-term strategic partnership, subject to receipt of applicable regulatory approvals and corporate authorisations, satisfactory completion of due diligence, and execution of definitive documentation," a regulatory filing by Max Financial said.

Max Life is currently the largest non-bank owned private life insurer in India, the company's BSE filing claimed. Max Financial Services presently holds a 72.5 percent stake in Max Life while Mitsui Sumitomo Insurance and Axis Bank hold 25.5 percent and 2 percent stake, respectively.

Shares of the company declined Rs 18.15, or 2.44%, to settle at Rs 725.80. The total volume of shares traded was 173,604 at the BSE (Monday).