Max India has decided to demerge the company into three parts in order to “unlock value” in the insurance businesses.
Analjit Singh, founder and chairman of Max Healthcare and Max Bupa Health Insurance Company Limited and Executive-Chairman of Max Life Insurance, took the decision after the sudden increase in foreign direct investment limits were established in the insurance sector. The company aims for the insurance Ordinance to hike investors’ interest in the life insurance area.
The group will be separated into three business categories: Max Financial Services dealing with life insurance, Max India Ltd dealing with health care, health insurance & allied businesses, and Max Ventures and Industries Ltd dealing with manufacturing activities.
Max Financial Services’ sole existence would be for life insurance, through 72.1% stake in Max Life. This makes it India’s first listed company which will focus on only life insurance.
Max India Ltd will determine providing funds for high-potential health and allied business. These businesses will be comprised of Max Healthcare, Max Bupa, Antara Senior Living and will be getting support from a service team.
Max Ventures would make a venture into exploring new businesses whose main focus would be on providing affordable solutions and guidance for people looking for establishing new businesses.
Mitsui and Bupa that are the foreign partners of the company have also expressed some desire in buying some stakes in the business of Max Financial Services of life insurance and Max Healthcare for health insurance to 49%.
Once the companies are properly separated and formed, Max India’s shareholders will be earning one equity share worth Rs 2 in Max Financial Services against one equity share of Rs 2 of Max India.
The official date of the commencement of the demerger has been set as 1st April. This splitting of Max India into three is expected to be properly complet within six to nine months.