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Max India, which recently relisted in bourses after a demerger process, said on Tuesday it will go in for a capital reduction programme that would entail buy back of shares to the tune of ₹92 crore to reward its public shareholders.
The company plans to offer its public (that is, non-sponsor group) shareholders the option of taking ₹85 per share for up to 20 per cent of their holding in lieu of cancelling these shares. Max India shares closed at ₹67.30 at the NSE on Tuesday. Post the demerger process, Max India has a treasury corpus of over ₹400 crore created primarily from the divestment proceeds of its erstwhile subsidiary, Max Bupa. It intends to utilise up to ₹92 crore from this corpus for the capital reduction process, while the balance of ₹300-plus crore will be apportioned for growth and other operational expenses. The board of Max India approved the capital reduction exercise on Tuesday. Post the capital reduction, Max India’s outstanding shares will decrease by up to 20 per cent from 5.38 crore shares to 4.3 crore. Mohit Talwar, Vice-Chairman, Max Group and MD, Max India said, “We had expressed our intent to reward our shareholders at the time we divested our health insurance business Max Bupa. This capital reduction process is a move towards that intent even though capital conservation has become important after the onset of Covid-19 induced economic slowdown. We will still have sufficient growth capital for growth and other expenses.”
Sponsor group holding
Meanwhile, the Max India sponsor group has communicated its intention of not tendering its shares for capital reduction. Consequently, its shareholding is likely to increase to 51 per cent from the current 41 per cent. It will seek a SEBI exemption from the open offer requirement, accordingly. The final quantum of the capital reduction will be based on SEBI’s decision on exemption.
Max India is the holding company of Max Group’s residences for seniors and senior care business, collectively known as ‘Antara’. It also owns a skilling company, ‘Max SkillFirst’.
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