Max India wraps up three-way demerger

Max India on Thursday announced its demerger into three listed companies, Max Financial Services, Max India and Max Ventures & Industries.

Analjit Singh has taken the position of founder and chairman emeritus after stepping down from the chairmanship as well as from the group's board. Rahul Khosla will be the new president of Max Group.

The shares of Max Financial Services would trade ex-demerger on January 25 and the listing of Max India and Max Ventures was likely around March 15, said Mohit Talwar, who will be managing director of Max Financial Services and Max India.

 

"We have applied to the Foreign Investment Promotion Board for allotment of shares in Max India and Max Ventures. We hope we will receive approval by the middle of February. If that happens, the allotment of shares to the two companies will take place around February 20. The listing of the two entities will then happen around March 15," Talwar added. (UNLOCKING VALUE)

To boost its life insurance business, Max Financial Services will have as its chairman Naina Lal Kidwai, who recently stepped down as chairman of HSBC India. Khosla will be the chairman of Max India.

The third holding company, Max Ventures and Industries, which manufactures packaging films and is planning to enter new business areas, will have Analjit Singh as its chairman. Sahil Vachani, his son-in-law, will join the company as managing director.

"We have a treasury corpus, as of April 1, 2015, of Rs 572 crore and this has been split as follows: Max Financial Services will receive Rs 150 crore, Max India Rs 412 crore, and Max Ventures Rs 10 crore," said Talwar.

Singh said the demerger would result in a substantial increase in investor interest.

"The momentum of these three businesses is such that if you put them all under one company the market punishes you. There have been situations where investors were interested in parts of our business. Now we will be working with sharper focus and the investor can involve himself according to his objective" he added.

After the demerger, shareholders of the erstwhile Max India will retain one equity share of Rs 2 in Max Financial Services. They will additionally receive one equity share of Rs 2 of the new company Max India for every one equity share held in Max Financial Services. Similarly, in Max Ventures & Industries, one equity share of Rs 10 will be given for every five equity shares of Rs 2 held in Max Financial Services.