|Max Financial Services Ltd.|
|Key Details :|
|52 Week H/L (Rs.)||611/280|
|Market Cap (Rs.Crs)||12568|
|Face Value (Rs.)||2.0|
|TTQ (in ‘000)||37|
|Shareholding Pattern (%)|
- 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.
|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|
Source : Capitaline
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.
- 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)|
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