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Max India on Tuesday announced a major corporate restructuring plan that would lead to the splitting of the ‘mini-conglomerate’ into three separate listed companies.
Unlocking value The restructuring is intended to give investors specific and undiluted access to its diverse lines of businesses, provide sharper focus to each underlying business and unlock shareholder value, Analjit Singh, Chairman, Max India, told a press conference here.
“With this restructuring plan, we have cleaned up the structure of Max India group. This will now give structural clarity to investors,” he said.
Renaming proposal The entire restructuring will be through a demerger process, which is expected to be completed within the next six to nine months.
Upon completion of demerger, the existing company, Max India, is proposed to be renamed Max Financial Services (MFS) and will focus solely on the group’s flagship life insurance activity, through its 72.1 per cent shareholding in Max Life.
MFS would then become the first Indian listed entity exclusively focused on life insurance.
Also, on completion of demerger, the second vertical is proposed to be named Max India, which will continue to manage investments in the high-potential health and allied business, essentially comprising Max Heathcare, Max Bupa, Antara Senior Living and supported by a corporate management services team.
The third vertical will house the investment activity in the group’s manufacturing subsidiary, Max Speciality Films, and will be named Max Ventures and Industries.
“Prime Minister Narendra Modi’s new initiative ‘Make in India’ is set to provide fresh impetus to this business and for this vertical, to start looking at fresh ideas in the wider world of business,” Singh said.
Share ratio Once the demerger scheme is effective, Max India’s shareholders will retain one equity share of ₹2 each in MFS and will additionally get one equity share of ₹2 each of Max India for every one equity share of ₹2 each held in MFS.
They will also get one equity share of ₹10 each of Max Ventures and Industries for every five equity shares of ₹2 each held in MFS. Singh also said the restructuring plan — which has been in the works for more than a year — was being approved by the Max India board at a propitious time, when there is tremendous positive sentiment about the economy and good business climate in the country.
“Our bouquet of business is diverse, but each has considerable value and growth potential.
“This demerger will provide investors with a choice to continue to be associated with all these businesses, or only specifically invest in the set of businesses that suit their respective investment philosophy,” he said while explaining the rationale for the restructuring.
On Tuesday, Max India stock closed 8.40 per cent higher at ₹492.75, on the BSE.
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