Max India fell 4.85% to Rs 78.50 at 9:29 IST on BSE after the company said it will sell its entire 51% stake in Max Bupa Health Insurance Company to a private equity firm.
The announcement was made after market hours yesterday, 26 February 2019.Meanwhile, the S&P BSE Sensex was up 273.84 points, or 0.76% to 36,247.55.
On the BSE, 68,000 shares were traded in the counter so far compared with average daily volumes of 1.61 lakh shares in the past two weeks. The stock had hit a high of Rs 84.70 and a low of Rs 75.80 so far during the day. The stock hit a 52-week high of Rs 97.40 on 27 February 2018. The stock hit a 52-week low of Rs 55 on 21 November 2018.
The board of Max India approved the sale of its 51% stake in Max Bupa Health Insurance Company (Max Bupa), to the leading private equity firm, True North. The all cash transaction values Max Bupa at an enterprise value of Rs 1,001 crore and is subject to requisite regulatory approvals. Bupa, the existing joint venture partner in Max Bupa, remains committed to the joint venture and will continue to play an active role in the company as before through its board positions and knowledge exchange initiatives.
The transaction will lead to a cash inflow of Rs 511 crore for Max India. The company intends to utilise the proceeds to invest in both existing and new business opportunities which are currently under evaluation.
At the conclusion of the transaction, True North will nominate directors on Max Bupa's board, while Max India's nominated directors will step down. The use of the Max brand will be phased out over a period of two years and replaced with a suitable name. The Bupa brand name will continue as before.
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The transaction is subject to execution of definitive agreements and approval from shareholders of Max India apart from regulatory bodies and is expected to be completed within FY 2020. The process of conclusion of Max Bupa's divestment will run in parallel and independent of the recently announced composite transaction involving demerger of Max India and the merger of Max Healthcare with Radiant-KKR.
Max India reported net loss of Rs 3.18 crore in Q3 December 2018 as against net profit of Rs 0.55 crore in Q3 December 2017. Total income declined 3.54% to Rs 14.19 crore in Q3 December 2018 over Q3 December 2017.
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. The company owns and actively manages a 49.7% stake in Max Healthcare, a 51% stake in Max Bupa Health Insurance and a 100% stake in Antara Senior Living.
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