The Hindu Business Line : Max India raises Rs 1,000 cr through qualified institutional placements

New Delhi June 20 Max India Ltd has raised Rs 1,000 crore through a qualified institutional placement (QIP), which was subscribed more than 2.3 times said the company. Max India also announced Rs 300 crore investment from the World Bank's funding arm, International Finance Corporation, Washington, to expand its healthcare business.

Addressing a press conference here on Wednesday, Mr B. Anantharaman, Joint Managing Director, Max India Ltd, said: "The company plans to use the net proceeds from this issue to meet its additional funding requirements in line with its strategic business plans to grow its existing businesses. A portion of the proceeds will also to be used for general corporate purposes including acquisitions and investments in new ventures."

Mr Anatharaman said these would be inline with the companies two main areas of insurance and healthcare, and could be in the areas of healthcare retail and health insurance.

FII stake goes up

The QIP raises the foreign institutional investment holding in the company to 39 per cent from 26 per cent earlier. The company has issued 4.16 crore new shares at a price of Rs 240 per share. Each share has a face value of Rs 2 and has been issued a premium of Rs 238 per share. The new shares aggregate to 18.8 per cent of the fully diluted equity base of the company.

"We have issued shares to 24 investors with 42 accounts and 80 per cent of the investors are looking at a long-term horizon and the rest are looking at it as a short-mid term horizon," said Mr Anantharaman. Geographically these are distributed in a ratio of 40 per cent for the US, 40 per cent in Europe with Asian investors making up for the remaining 20 per cent.

Regarding Max New York Life (MNYL), Mr Anatharaman said they hoped to add another 400 new offices to their existing 165 across the country in the next two to three years and an additional 50,000 agents to their current strength of 25,000 agents.

The IFC investment, which comes with IFC acquiring about 3.4 per cent stake in Max Health care Institute for about Rs 50 crore, will fund three new hospital projects. "IFC has picked up 3.4 per cent stake in the company by paying Rs 50 crore at Rs 55 per share and the remaining Rs 250 crore has been raised by a preferential issue," he said.

With their existing eight hospitals in the NCR region, the company has completed phase one of its healthcare plans with an investment of Rs 690 crore.

"In phase two, which we have entered into with the ground-breaking for our super speciality hospital, we will be doubling bed capacity from 750 to 1,500 and going beyond the capital," said Mr Anantharaman. "In two years time Max Healthcare would have completed its planned projects with this investment, and could look at raising money from the capital market," he added.

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