| Max Financial Services Ltd. |
| Key Details : | ||
| CMP (Rs.) | 463 | |
| 52 Week H/L (Rs.) | 611/280 | |
| Market Cap (Rs.Crs) | 12568 | |
| Face Value (Rs.) | 2.0 | |
| TTQ (in ‘000) | 37 | |
| Shareholding Pattern (%) | |
| Promoter | 28.31 |
| Institutions | 59.69 |
| Public | 12.10 |
Overview:
- Max Financial Services Limited (MFS), a part of the USD 3.2 bn Max Group, is the holding company for Max Life, India’s largest non-bank, private life insurance company.
- Max Financial Services owns and actively manages a majority stake in Max Life Insurance Company Limited, making it India’s first listed company focused exclusively on life insurance. Max Life is a joint venture with Mitsui Sumitomo Insurance (stake ~25%), a Japan-headquartered global leader in life insurance.
- Max Life has an extensive presence across India through its own offices and distribution partners and is the 4th largest private Life Insurance player in the country.
Management :
| Name | Designation |
| Analjit Singh | Chairman (Non-Executive) |
| Mohit Talwar | Managing Director |
Financials (Consolidated) :
| (Rs Mn) | FY 15 | FY 16 | FY 17 | FY 18 | FY 19 | FY 20 |
| Operating Income | 149077.3 | 117098.9 | 152467.2 | 163377.4 | 194982.9 | 182399.8 |
| EBITDA | 7174.4 | 5311.7 | 7710.5 | 5310.7 | 4840.0 | 5235 |
| Adjusted Profit | 2802.2 | 2527.2 | 3949.0 | 2864.3 | 2627.0 | 2687.7 |
| EPS | 10.5 | 9.5 | 14.8 | 10.7 | 9.8 | 10.0 |
| OPM (%) | 4.8 | 4.5 | 5.1 | 3.3 | 2.6 | 2.9 |
| NPM (%) | 1.9 | 2.2 | 2.6 | 1.8 | 1.3 | 1.5 |
| PE (x) | 44.1 | 49.0 | 31.4 | 43.5 | 47.6 | 46.5 |
| RoE (%) | 8.5 | 12.9 | 16.9 | 15.7 | 12.8 | 12.5 |
| RoCE (%) | 13.3 | 17.7 | 23.0 | 20.4 | 17.9 | 15.7 |
Source : Capitaline
Recent Updates:
Axis Bank and Max Financial Services Deal Background
- Axis Bank Ltd (Axis Bank) and Max Financial Services Limited (MFS) announced the signing of definitive agreements to become joint venture partners in Max Life Insurance Company Limited (MAXL).
- Axis Bank will hold 30% stake in Max Life post transaction closure.
- The development will result in a mutually beneficial and enduring relationship between Axis Bank and Max Life and bring the stability of a long term partnership to India’s fourth largest private life insurance franchise.
- The joint venture arrangement will significantly improve Max Life’s competitive position vis a vis its competitors, including the other large bank owned private life insurers.
Deal
- Max Financial Services presently holds a 72.5% stake in Max Life and Mitsui Sumitomo Insurance (MSI) owns 25.5% stake. Axis Bank also has a minor stake in the Max life.
- The aforesaid transaction with Axis Bank follows the ongoing swapping by MSI of 20.6% stake that it holds in Max Life with a 21.9% stake in MFS.
- MFS also plans to purchase MSI’s balance stake in Max Life.
- Post the swap transaction, Axis Bank will buy out 29% of MLI from MFS (currently holds ~1% in Max Life).
- Post completion of the series of transactions, Max Life will become a 70:30 joint-venture between Max Financial Services and Axis Bank.
- The proposed transactions are subject to approval of requisite corporate and regulatory authorities (including IRDAI, RBI and CCI). Company expects deal to be completed within one year.
- Valuation of stake will be dependent on the tax adj. BV of MAXL (Dec-19: Rs 56bn, 29% at Rs 16bn) as on transaction date. Axis Bank indicated that they will buy 55.6 crore shares of Max Life for a total consideration (estimated) of Rs. 1,592 crore, but the final amount will depend on exact pricing at the time of transaction. (*Only guided).
Mitsui Sumitomo swap indicative process:
- The construct of the transaction is such that Mitsui Sumitomo (MSI) will first swap part of its shareholding in MAXL for a shareholding in the holdco, i.e., Max Financial Services (MFS).
- As a result of this swap, MFS will end up owning ~94% stake in MLI and MSI will still hold ~5% in MLI which, at a later stage, would be bought out by MFS.
- Post the swap transaction, Axis Bank will buy out 29% of MLI from MFS (currently holds 1% in Max Life). Finally, MAXL would be reverse merged with MFS, effectively becoming a listed entity.
- The proposed transaction structure awaits regulatory approvals.
Share Price Trend:
| Year | Open (Rs) | High (Rs) | Low (Rs) | Close (Rs) |
| 2010 | 222 | 245 | 132.9 | 147.45 |
| 2011 | 148.45 | 214.75 | 137 | 148.25 |
| 2012 | 146.25 | 266.7 | 140.45 | 241.9 |
| 2013 | 244 | 264.9 | 150.5 | 215.2 |
| 2014 | 217 | 442.7 | 177.6 | 394.9 |
| 2015 | 397 | 585.75 | 381.1 | 496.1 |
| 2016 | 509.2 | 627.4 | 303 | 548.5 |
| 2017 | 547.5 | 683.2 | 513 | 591.15 |
| 2018 | 589.3 | 604.2 | 343.95 | 445.25 |
| 2019 | 449 | 544.9 | 361.1 | 534.7 |
| 2020 | 535.8 | 611.05 | 279.75 | 476.65 |
Max Group
2016 – Demerger/split of Max India Ltd into three entities –
- Max Financial Service Ltd with the insurance business,
- Max India Ltd with the healthcare and allied businesses and
- Max-Ventures and Industries Ltd with specialty packaging film business.
- Max Financial Services (MFS)
- After the split, Max India was renamed as ‘Max Financial Services Ltd (MFS) and solely focus on the group’s flagship life insurance activity, through 72.1% (then in 2016) in Max Life, making it the first Indian listed company solely focused on life insurance.
- Max India Ltd
- The second vertical “Max India Ltd” (MIL) continued to manage investment in the high‐potential health and allied business comprised of Max Healthcare, Max Bupa, Antara Senior Living and supported by a corporate management service team.
- Max Ventures & Industries Ltd
- The third vertical will be named Max-Ventures and Industries Ltd (MVIL), which will house the investment in the group’s manufacturing subsidiary Max Specialty Films ‐ one of the leaders in the specialty packaging films busines
