Max India demerges into 3 entities; rejigs management

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Max India, which demerged itself into three to-be-listed entities on Friday, said it is open to mergers and acquisitions in financial services space as well as entering into new arenas other than telecom.

The group also announced leadership changes with the transition of Analjit Singh to the position of Founder and Chairman Emeritus, Max Group. Rahul Khosla will be the Group President.

“New wave of possibilities that is appearing in the market driven by digital technologies, e-commerce, affordable solutions… I would be disappointed if we don’t find one new area in next 12 months to do,” Singh told reporters.
The three Max Group entities, to be listed by March end are Max Financial Services, Max India and Max Ventures and Industries Limited.

MAX, a pillar of trust, has now transformed into 3 separate listed companies, making #2016 the year of #MAXValue. pic.twitter.com/JvD4zJinU9
— Max Group (@MaxGroup) January 15, 2016

Singh said Max Ventures and Industries will serve as the Group’s entrepreneurial arm to explore the wider world of business, especially taking cues from the economic and commercial reforms agenda of the government, including programmes like Make in India, Skill India, Digital India.

ALSO READ: Max India gets High Court approval for demerger

Singh, however, clarified that the Group, which has revenues of around Rs 15,000 crore (about $2.2 billion), will not look at entering the telecom space.

Max Financial Services, the holding company for Max Life, which has a war chest of about Rs 2,000 crore, will look at various areas including retirement, mutual fund and distribution. It will also explore Merger and Acquisitions (M&As). In the next 9-18 months, there will be some action in financial services space, Singh said.

The company will focus solely on managing the Group’s flagship life insurance business through its 72% shareholding in Max Life making it the first Indian listed company exclusively focused on life insurance.

The third entity, Max India, will manage investments in the high potential Health and Allied businesses – Max Healthcare, Max Bupa and Antara Senior Living.

With regard to rejig, Singh said, Naina Lal Kidwai joins the Max Group as Chairman of Max Financial Services (MFS). She has recently stepped down from the position of Chairman, HSBC India.

The demerger will give investors specific and undiluted access to the Group’s diverse lines of businesses, provide a sharper focus to each operating business and unlock shareholder value, Singh said. It will provide these businesses, currently in their growth and development phases, closer attention to fulfil their tremendous potential.

The demerger, announced in January 2015 was concluded after consent and approvals from the High Court of Punjab and Haryana, the Insurance Regulatory and Development Authority of India (IRDAI), the Securities and Exchange Board of India (SEBI) and the Competition Commission of India (CCI).

Post-restructuring, the erstwhile Max India’s existing shareholders will retain one equity share of Rs 2 in Max Financial Services. They will additionally get one equity share of Rs 2 each of the new company Max India for every one equity share held in Max Financial Services, and one equity share of Rs 10 each of Max Ventures and Industries Limited for every 5 equity shares of Rs 2 each held in Max Financial Services.

The company has applied for approval from the Foreign Investment Promotion Board (FIPB) to enable issuance of the aforesaid new shares to foreign shareholders. The record date is January 28 for determining the entitlement of equity shares of demerged companies.

Shares of Max Financial Services will be listed on January 25 on the stock exchanges. Besides, Max India and Max Ventures and Industries Limited (MVIL) are expected to be listed by March.

The authorised share capital of the company stands reduced to Rs 60 crore from the present level of Rs 100 crore in terms of the composite scheme of arrangement. The balance Rs 40 crore has been transferred as part of the composite scheme of arrangement to Taurus Venture to be renamed as Max India.

Showcasing this restructuring will be a rejuvenated Max logo, which has been redesigned to become smarter and more contemporary while retaining the essence of its existing components that project its representation of the businesses of life. All operating companies will incorporate this new Max logo, including Max Bupa whose redesigned logo will now bear a more representative reflection of its Max Group lineage.

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