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Max India planning corporate restructuring

15 January, 2015

Max India Ltd, a diversified firm engaged in the business of life and health insurance, clinical research, healthcare services and manufacturing specialty films, is planning a corporate restructuring, the company said in a stock market disclosure.

It did not provide details on the proposed restructuring but was responding to a report in The Economic Times which said, citing sources, that Max India is headed for a three-way split into insurance, healthcare and specialty films businesses.

“Besides unlocking value for the shareholders, one of the key reasons for demerging these businesses is that each of these had gone through hiccups in initial phases and has now turned around,” ET quoted its source.

In a public statement Max India said, that it is in the process of finalising a few options for corporate restructuring, which will be presented to Investment & Finance Committee (I&FC) for its consideration.

Max India holds 74 per cent stake each in Max Life Insurance and Max Bupa Health Insurance and a 46 per cent stake in Max Healthcare, which runs Max Hospital. The firm plans to list both healthcare and insurance ventures separately and the shareholding pattern in this holding entity will be similar to that of Max India.

Promoter Analjit Singh owns 40.5 per cent stake in the listed firm which also counts Goldman Sachs, Temasek, IFC among its other shareholders.

Last week, Bupa proposed to increase its stake in Indian health insurance joint venture to 49 per cent for an undisclosed amount.

Last year in July, South African hospital chain Life Healthcare decided to increase its stake in Max Healthcare to 46.5 per cent from 26 per cent for up to Rs 794 crore ($132 million). At this price, the hospital chain was being valued at about Rs 4,000 crore and the Max India’s stake at around Rs 1,800 crore. IFC is another investor in this hospital firm.

In April 2012, Japanese insurance company Mitsui Sumitomo Insurance (MSI) bought out US-based New York Life’s 26 per cent stake in Max New York Life Insurance for Rs 2,731 crore. At this price, the insurance JV was valued at Rs 10,504 crore.

Shares of Max India last changed hands at Rs 400.55 each, down 1.72 per cent on the BSE in a strong Mumbai market on Thursday.

(Edited by Joby Puthuparampil Johnson)


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Max India planning corporate restructuring

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