Max India Sponsors To Increase Shareholding By 4% To 45.12%

Max India Limited announced that it will raise funds from its promoter — Max group’s founder, and chairman emeritus Analjit Singh, by issuing warrants amounting to Rs 300 crore at Rs 154.76 per share of Max India, priced in accordance with regulatory guidelines.

The total number of warrants issued will be 19,384,854 which translate to approximately 4% stake in the company for the promoter. The promoter’s shareholding in the company will increase to 45.12% as a result of this transaction.

A significant portion of the proceeds from this transaction will be utilised by Max India to acquire a 3.75% stake in its flagship business Max Healthcare (MHC) from International Finance Corporation (IFC), which owns a 7.5% stake in the latter.

IFC’s balance 3.75% stake in MHC will be acquired by Max India’s joint venture partner in MHC, the Life Healthcare Group, which is South Africa’s second-largest hospital chain. The total consideration for the stake acquisition will be Rs 423 crore, translating to Rs 105 per share of MHC.

IFC has been a long-standing investor in MHC, which acquired stakes in multiple tranches over a period of 10 years. After acquisition, both joint-venture partners’ stake in MHC will increase to 49.7% each.

Rahul Khosla, President, Max group, said that “Max India’s stake increase in Max Healthcare reflects our confidence in the company’s potential. We remain committed to providing the capital the business needs to continue on its growth trajectory.”

Max Healthcare, Max India’s flagship operating company, reported 23% growth in Gross Revenues to Rs 1,939 crore in first 9 months, while its EBITDA grew 34% to Rs 203 crore over the corresponding period in 2016. During 9M FY2017, a significant proportion of revenue contributions came from MHC’s major specialities.