Max India has made an exit from the insurance business as it has sold its entire 51 per cent stake in Max Bupa Health Insurance Co Ltd (Max Bupa) to private equity firm True North Fund VI LLP for over Rs 510 crore.
The stake has been sold either directly or through its affiliates, Max India said in a regulatory filing.
The board of directors of the company at its meeting held on February 26, 2019, has considered and approved a proposal relating to divestment of entire shareholding of the company in its material subsidiary — Max Bupa Health Insurance Company Limited (Max Bupa) (equivalent to 51 per cent of Max Bupa’s total issued and paid-up share capital) to True North Fund VI LLP, it said.
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, it added.
“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,” the statement said further.
Responding to the development, Analjit Singh, Founder & Chairman, Max Group, said: “We are rebalancing our portfolio of businesses with a much sharper focus on growing shareholder value, and this transaction is a step towards that journey. We are sure that Max Bupa will continue its excellent performance under its new shareholders, ably supported by the founding JV partner Bupa.”
“Our selection criteria for the potential investor in Max Bupa was based on a shared vision for the company, alignment with our JV partner Bupa, and a commitment to invest in the long-term growth of the company,” said Mohit Talwar, Vice Chairman Designate, Max Group.
Divya Sehgal, Partner, True North, said as the health insurance sector grows in India, True North is looking to build the most trusted brand in health insurance in the country.