After an earlier exposure to India’s largest healthcare firm Apollo Hospitals, Singapore government owned investment firm Temasek has bought shares in Delhi-headquartered healthcare and insurance group Max India. Temasek, one of the two sovereign wealth funds managing investments of Singapore government (the other being GIC), has reportedly picked up more than 3% stake in Analjit Singh-owned Max India through open market purchases, The Economic Times reported on Thursday.
Although its holding is yet to reach the threshold level of 5% after which an investor has to disclose its position in a listed company in India, its holding is expected to show up in the next shareholding pattern disclosure for the quarter ending December 31 as it has crossed the 1% mark at which stock exchange disclosures captures individual shareholders.
The investment by Temasek gives it twin exposure in healthcare and insurance business in India. Delhi-headquartered Max India operates a chain of healthcare service centres under Max Healthcare and also owns a stake in the group’s life insurance joint venture with New York Life.
This marks a return in healthcare exposure for Temasek in India. It had sold off its investment in the country’s largest hospital chain Apollo Hospitals three years ago to Malaysia’s sovereign fund Khazanah. Temasek’s India head Manish Kejriwal had reportedly said in October that the fund is looking to expand the sectoral exposure in India to include firms in infrastructure and healthcare.
Temasek also becomes one of the first such investment fund house to gain exposure to Indian insurance market, although indirectly. Max India holds 73.68% in Max New York Life Insurance besides 74% stake in Max Bupa Health Insurance. Max India’s subsidiaries and associate companies are also in other activities including clinical research.
Temasek. which has stakes in key Indian companies such as the largest private lender ICICI Bank, top telecom firm Bharti Airtel as also its infrastructure arm Bharti Infratel and direct-to-home television service operator Tata Sky, has apparently acquired the shares with an average price of Rs 160 a piece as per the ET report.
Max India’s share price was up 1.5% to Rs 139.8 in early trading hours at the Bombay Stock Exchange after report of Temasek’s investment became public. The stock is still much below its 52-week high of Rs 245 in January 2010.
The open market transaction by Temasek to buy a stake could be explained by low promoter holding in Max India. As of September 30, Analjit Singh held 36.44% stake in Max India, much below the comfortable level of 50% or above that brings majority control over voting rights. Such shareholding could have prevented the promoters to go for a negotiated equity dilution in the firm.