Max India trades jubilantly on getting nod to split into three separate listed companies

Max India is currently trading at Rs. 486.00, up by 31.45 points or 6.92% from its previous closing of Rs. 454.55 on the BSE.

The scrip opened at Rs. 464.00 and has touched a high and low of Rs. 505.00 and Rs. 463.00 respectively. So far 1231458 shares were traded on the counter.

The BSE group 'A' stock of face value Rs. 2 has touched a 52 week high of Rs. 505.00 on 27-Jan-2015 and a 52 week low of Rs. 177.60 on 20-Feb-2014.

Last one week high and low of the scrip stood at Rs. 505.00 and Rs. 400.95 respectively. The current market cap of the company is Rs. 12958.70 crore.

The promoters holding in the company stood at 40.48% while Institutions and Non-Institutions held 49.42% and 10.10% respectively.

Max India has received its board’s approval for Corporate Restructuring plan to vertically split the company through a demerger, into three separate listed companies, to give investors specific and undiluted access to its diverse lines of businesses, provide sharper focus to each underlying business, and unlock shareholder value. The company’s board also approved divestment of its clinical research business.

Upon completion of the demerger, the existing company, Max India, is proposed to be renamed Max Financial Services (MFS) and will focus solely on the group’s flagship life insurance activity, through its 72.1% shareholding in Max Life, making it the first Indian listed company exclusively focused on life insurance. The Insurance Amendment Ordinance, recently promulgated by the President of India, and widely expected to be approved as an Act, has created renewed investor interest in the life insurance sector.

Upon completion of the demerger it is proposed to name the second vertical Max India, which will continue to manage investments in the high potential Health and Allied businesses, essentially comprising; Max Healthcare, Max Bupa, Antara Senior Living and supported by a Corporate Management Services team. The demerger will provide these businesses, which are currently in their growth and development phases, sharpened focus to fulfil their tremendous potential. The Corporate Management Services team will manage a shared services centre, which will provide functional support to all 3 verticals.

The third vertical will house the investment activity in the group’s manufacturing subsidiary, Max Speciality Films - an innovation leader in the Speciality Packaging Films business - and will be named Max Ventures and Industries (MVIL). Set-up in 1989, the Speciality Packaging Films business has been consistently profitable. It recorded revenues of Rs 746 crore and profit of Rs 14 crore in FY2014. The Prime Minister's new initiative Make in India is set to provide fresh impetus to this business and for this vertical, to start looking at fresh ideas in the wider world of business.

Max India has also initiated action for the divestment of its entire 100% stake in the clinical research business. Max Neeman entities in India and United States are proposed to be divested to a Canadian Contract Research Organization (CRO), JSS Medical Research Inc., for a consideration of $1.5 Million, subject to successful completion of due diligence and signing of definitive agreements, expected by mid-February.