Max India scrip surges over Hutch exit buzz

The share price of Max India has risen sharply in the last few days over speculation that the company is close to offloading its residual stake in Hutch Max, which operates cellular telephony services in Mumbai, and pass on hefty dividends to the company's shareholders, market sources said.

From Rs 99.85 on December 1, the stock rose to Rs 139.65 on December 8, Rs 147.75 on December 15 and Rs 182.70 on December 18 on the Bombay Stock Exchange (BSE). Max India closed at Rs 179.50 today. Currently, the share is close to 52-week high of Rs 198.

Max India officials said the company had no immediate plans to sell its stake in the venture. However, Max India chairman Analjit Singh, had recently told Business Standard that he was open to the idea of offloading the Hutch Max stake.

But since prospective Indian buyers (overseas buyers are not in the picture as foreign holding in the venture is at its maximum permissible limit of 49 per cent) were not offering the right value, he might offload the shares whenever Hutch goes for a public listing.

Max India holds the stake through a subsidiary called Max Telecom Ventures. As it owns two-thirds of the equity of this company, its effective shareholding in Hutch Max works out to around 6.6 per cent.

According to Max India sources, once all Hutch circles are merged in the country before the proposed IPO, this stake will further fall to between two per cent and three per cent.