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Our Bureau

Healthcare arm to raise Rs 400 cr separately thru pref allotment

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New Delhi Feb. 22 Max India Ltd said on Thursday that it is planning to raise Rs 1,000 crore through qualified institutional placement (QIP) to fund expansion. The company would utilise a majority of the funds raised to expand its life insurance business, Max New York Life Insurance. Max India is looking at a pan-India presence for its insurance business and is planning to strengthen the branch network for Max New York Life (MNYL).

MNYL is a joint venture between Max India and US-based New York Life in which the company holds a majority 74 per cent stake. ``The QIP is proposed to meet the funding requirements of the company in line with its long term strategic business plans to further grow all the existing businesses and more specifically the life insurance business,'' Max India Ltd Joint Managing Director Mr B. Anantharaman told newspersons here.

To up paid-up capital

Max India also plans to raise paid-up capital of its insurance arm to Rs 1,000 crore from the existing Rs 707 crore by the end of 2008.

The company's board at a meeting held on Thursday approved a proposal to raise up to Rs 1,000 crore through issue of equity shares or any securities to Qualified Institutional Buyers in one or more tranches, subject to approval of shareholders.

An extraordinary general meeting of the shareholders has been convened on March 23 to seek their approval for the proposed fund raising exercise.

Healthcare arm

Apart from the Rs 1,000 crore, the group is planning to raise an additional Rs 400 crore for its healthcare subsidiary, Max Healthcare, to set up a new hospital and increase the number of beds at existing hospitals.

"Max Healthcare would raise around Rs 400 crore separately through preferential allotment to expand existing facilities and set up a new hospital in Dehradun," Mr Anantharaman said.

Hospital management pacts

He said the company is also in talks with various hospitals to run and manage these hospitals under a management agreement. "The process of raising funds for Max Healthcare is expected to be complete within three-four months," he added.

As per the expansion plans, Max Healthcare would set up a 140-bed facility in Dehradun while it will add 100 beds each to its two hospitals in Delhi.

Apart from insurance and healthcare, Max India has interests in packaging, clinical research and education and training businesses.

Max India recently invested Rs 125 crore in its packaging business to increase the capacity of its plant to 20,000 tonnes. The company expects revenues from the packaging business to quadruple to Rs 500 crore in the next fiscal.

More Stories on : Preferential Allotments | Life Insurance

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