Max Ventures and Industries tumbled 11.58% to Rs 134.40 after the company said it will sell its remaining 51% stake in specialty films business to Japanese partner, Toppan, for Rs 600-650 crore in all-cash deal.
Max Ventures & Industries (MaxVIL) has entered into a definitive agreement with its existing Japanese strategic partner in Max Speciality Films - Toppan Printing - to divest its remaining 51% stake in the specialty packaging films business for an enterprise value of Rs 1,350 crore, translating into an equity value of about Rs 600-650 crore (subject to customary adjustments). Toppan would also be taking over the debt of MSFL as part of the deal.After acquisition of 49% stake in 2017 for about Rs 200 crore Toppan became a strategic partner of MaxVIL.
Post this exit, MaxVIL will completely focus on the real estate business in the premium residential and commercial space in Delhi-NCR.
Commenting on the stake sale, Sahil Vachani, MD & CEO of MaxVIL, said: "The decision to divest our residual 51% stake in specialty packaging business to the existing partner is to generate additional growth capital to deploy in the real estate business that offers tremendous growth opportunities."
After the divestment, MaxVIL will be able to create a war-chest of more than Rs 1,000 crore funded from sale proceeds, internal accruals, and potential commitment from financial investors. This will help in expanding the residential and commercial real estate footprint in Delhi-NCR, the company said in a statement.
New York Life Insurance Company, a longstanding partner of the Group, is a strategic investor in the company, owning about 23% stake. Additionally, it has also invested at the project level through SPVs (special purpose vehicles) route by picking up a 49% stake in Max Square, a commercial project on the Noida-Greater Noida Expressway. The company will continue to look for such strategic/financial partners to back its expansion plans.
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MaxVIL said it is in advance discussions with nearly half a dozen landowners to acquire and develop prime land parcels in Delhi-NCR.
Further, the board of directors have authorized the investment and finance committee of the board to explore various modalities for restructuring with its wholly owned subsidiary Max Estates and be renamed as Max Estates, after receiving required statutory approvals. The change of name will resonate better with the business vision, strategy and focus of the company.
MaxVIL also announced its financial results for the second quarter (Q2) of FY22. On a consolidated basis, the company reported net profit of Rs 12.06 crore in Q2 FY22 as against a net loss of Rs 11.48 crore in Q2 FY21. Net sales rose 30.20% to Rs 376.32 crore in Q2 FY22 over Q2 FY21.
The consolidated EBITDA rose 20% from the corresponding year-ago period to Rs 62.7 crore.
Speaking on the company's quarterly (Q2) performance, Vachani said: Q2FY22 proved to be a splendid quarter for our commercial real estate business. Max Towers and Max House are 93% and 60% leased, respectively, while commanding a 20-25% rental premium in the micro-market. With a strong enquiry pipeline, aided with recovery in the country's economy, we are extremely confident of 100% leasing of both of our assets this financial year, and of our growth trajectory moving forward.
MaxVIL, a part of India's leading multi-business conglomerate, Max Group, operates across two businesses of real estate and speciality packaging films.
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