Indian private lender Axis Bank has signed a non-binding agreement with Go Digit Life Insurance to acquire a 9.94% stake in the insurer. 

In a stock filing, the bank said it plans to invest between INR499m ($6.12m) and INR699m ($8.57m) in the life insurance firm. 

As per the terms of the agreement, Axis Bank will make the investment in the firm in two tranches.

The deal is subject to the signing of definitive agreement, for which the terms and conditions are to be mutually agreed upon, and fulfilment of other terms and conditions, it added.

Axis Bank noted that the life insurer is yet to receive a “certificate of registration” from the Insurance Regulatory and Development Authority of India.

The deal highlights private banks’ interest in capitalising on the opportunity offered by India’s untapped insurance space. 

Last month, Axis Bank’s larger peer, HDFC Bank agreed to buy up to a 9.944% stake in Go Digit Life Insurance. 

Currently, Axis Bank offers some insurance products in partnership with Max Financial. 

Recently, the general insurance arm of Digit, Go Digit General Insurance submitted draft documents for an initial public offering (IPO) with the markets regulator. 

The Fairfax Financial Holdings-backed general insurer had planned to raise about $440m through the IPO, which was put on hold by the Securities and Exchange Board of India (SEBI) earlier this month.

Digit Insurance was one of the first unicorns of 2021 and in July of that year, the insurance company raised $200m from existing and new investors.