Multi-business corporate Max India plans to enter new areas of business after selling its hospitals and health insurance subsidiaries.
Analjit Singh-led group is currently in the middle of selling 51 per cent stake in its health insurance joint venture Max Bupa to private equity firm True North. The process is likely to be completed in the next six months.
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The company has also undertaken a transaction which will result in its demerger into two listed entities.
The first entity, created from a merger of Max Healthcare with the KKR backed hospital operator Radiant Life Care, will be India’s third largest corporate hospital chain with over 3,200 beds and 16 hospitals.
It will be automatically listed on the Indian stock exchanges, said Max India in regulatory filings after market closing hour on Monday.
The other demerged entity, which has currently been named as Advaita, will own the group’s senior living business — Antara Senior Living. It will also manage a corpus of over Rs 500 crore received from the divestment of Max Bupa.
Max Group’s Founder and Chairman Analjit Singh is looking to start afresh in Advaita by venturing into one or two new business areas which will have adjacencies to the group’s latest focus areas of life insurance, real estate, senior care, and lifestyle.
Besides being utilised for seeding new businesses, Advaita proposes to utilise its cash reserves for offering an exit opportunity through a capital reduction process to shareholders who may not be keen on investing in unchartered areas.
This will allow such shareholders access to proportionate proceeds from Max Bupa divestment and encash their shareholding.
“Our aim is to recreate the Max India story all over again by seeding high potential businesses and doing them the Max way, which will likely create significant value for those who stay invested with us,” said Singh. “I remain committed to grow Max India and retain my shares in the company.”
Mohit Talwar, Vice Chairman of Max Group and Managing Director of Max India, said: “Our choice of businesses and smart capital management has resulted in a 23 per cent internal rate of return for Max India investors since we went public.”
“This, even when our stock prices are unusually depressed currently. The business portfolio rebalancing will provide fresh impetus to this growth and returns,” added Talwar.
The new businesses will be decided by next year which is the anticipated timeframe for the demerger and listing of New Max India, currently being called Advaita Allied Health Services Ltd.
Max India, the holding company of Max Bupa Health Insurance and Antara Senior Living and equal joint venture partner in Max Healthcare, is focused on health and allied businesses. Max Healthcare and Max Bupa Health Insurance are joint ventures with global leaders Life Healthcare (South Africa) and Bupa Finance Plc (UK).
These businesses have well-entrenched positions in their respective categories. The company owns and manages 49.7 per cent stake in Max Healthcare, 51 per cent stake in Max Bupa Health Insurance and 100 per cent stake in Antara Senior Living.