Max India to explore rewarding shareholders via Capital Reduction
Max India to offer acquiring up to a maximum of 20% of its outstanding shares from public shareholders at Rs 85 per share; a premium of 37% to its last closing price of Rs. 62 per share
Company to utilize up to Rs 92 Cr. for the capital reduction exercise
Offer comes shortly after the relisting of Max India shares post demerger
15th September 2020, New Delhi
Max India Limited, a part of the USD 3 bn Max Group, today announced that it will explore a capital reduction program to reward its shareholders, as communicated during the divestment of Max Bupa by the erstwhile Max India. The company plans to offer its public (i.e., non-sponsor group) shareholders the option of taking Rs 85 per share for up to 20% of their shareholding in lieu of cancelling these shares.
Max India, which recently relisted on the Indian bourses on August 28, 2020 after a demerger process has a treasury corpus of over Rs 400 Cr. created primarily from divestment proceeds of its erstwhile subsidiary, Max Bupa. It intends to utilize up to Rs 92 Cr. from this corpus for the capital reduction process, while the balance of Rs 300+ Cr. will be apportioned for growth and other operational expenses. Max India’s shares closed at a price of Rs. 62 per share on September 14, 2020. The cash out through a Capital Reduction process translates to a 37% premium to this price.
The Board of Max India approved the capital reduction exercise earlier today. The proposal will also need to be approved by a special resolution of public shareholders. It will additionally need regulatory approvals including from stock market regulator and NCLT, Mumbai. The approvals process is expected to take about 6-8 months. Post capital reduction, Max India’s outstanding shares will decrease by up to 20%, from 5.38 Cr. to 4.3 Cr.
The Max India sponsor group has communicated its intention of not tendering its shares for capital reduction. Consequently, their shareholding is likely to increase to 51% from the current 41%. They will seek a SEBI exemption from the open offer requirement accordingly. The final quantum of 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’.
Speaking on the occasion, Mohit Talwar, Vice Chairman, Max Group & Managing Director, 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.”
Antara, Max India’s flagship operating business is an integrated service provider for all senior care needs. It operates across two categories – Residences for Seniors and Assisted Care Services. Antara’s flagship residential community is located in Dehradun with nearly 200 apartments. Earlier in the year 2020, it launched a new senior living facility in Noida, Sector-150. With 340 apartments in its first phase of development, it will cater to the social, recreational, educational, wellness, and health-related needs of seniors and be ready for living by 2024.
Antara’s Assisted Care Services include ‘Care Homes’ and ‘Care at Home’. They cater to seniors over the age of 55, who need more immersive interventions in their daily lives due to medical or age-related issues. With its first facility in Gurugram launched in July 2020, Antara’s Care Homes, provide long-term care to seniors who need constant medical and nursing supervision and short-term care services for recuperation. Antara plans to set up a chain of 35-40 Care Homes, including Memory Care Homes in the next 3-4 years. Its Care at Home services will provide well-equipped, medically trained professionals who can offer seniors care inside their own home’s comfort.
Max India also operates a skilling company, Max SkillFirst. It is a skilling solutions provider for professionals in the sales and services domain.
About Max Group
The Max Group is a leading Indian multi-business conglomerate with a commanding presence in the Life Insurance industry and has ventured into high potential sectors of Senior Care and Real Estate. The Group recorded consolidated revenues of ~Rs. 19,800 Cr. in FY2020. It has a total customer base of ~4 million, around 400 offices spread across India and an employee strength of more than 16,000 as on 31st March 2020.
The Max Group comprises three holding companies – Max Financial Services and Max Ventures & Industries, which are listed on the Indian stock exchanges, and Max India, which was delisted on June 11, 2020 as a part of an ongoing demerger process and relisted on the BSE and NSE on August 28, 2020.
The Group’s investor base includes marquee global financial institutions such as New York Life, KKR, IFC Washington, Baron, Vanguard, Ward Ferry, Briarwood Capital, Locus Investments, Nomura, First State Investments, Blackrock, First Voyager, Eastspring, Target Asset Management, Jupiter, Habrok and Doric Capital.
Launched in 2013, Antara is a wholly owned subsidiary of Max India Limited. It is an integrated service provider for all senior care needs. It operates two main lines of businesses – Residence for Seniors and Assisted Care Services.
Antara’s first residential community in Dehradun consists of around 200 apartments spread across 14 acres of land. In 2020, Antara launched a new senior living facility in Noida, Sector-150. With 340 apartments in its first phase of development, it will cater to the social, recreational, educational, wellness, and health-related needs of seniors and will be ready for possession by 2024.
Antara’s Assisted Care Services include ‘Care Homes’ and ‘Care at Home’. They cater to seniors over the age of 55, who need more immersive interventions in their daily lives due to medical or age-related issues. Starting with the first facility in Gurugram, Antara’s Care Homes, provide long-term care to seniors who need constant medical and nursing supervision and short-term care services for the recuperation of seniors. Antara plans to set up a chain of 35-40 Care Homes in the next three years. Its Care at Home services will provide well-equipped, medically trained professionals who can offer seniors care inside their own home’s comfort.