Economic Times: January, 2017
New Delhi: New York Life Insurance Company, the largest mutual life insurance company in the United States, has picked up 22.51 per cent stake for Rs 121 crore in Max Ventures and Industries Limited, a company that was formed after restructuring of Max India in 2016.
Max Ventures promoter, Analjit Singh and families will also invest additional Rs 27 crore by way of convertible warrant on preferential basis to bolster the company's capital and also to retain their ownership at 38 per cent.
The company will invest the proceeds into education and real estate, the new focus areas for its future businesses.
"New York Life investment in Max Ventures is of strategic nature and is beginning of a long term journey. After the successful partnership in life insurance business, we are confident to build new business that will create value for all our stakeholders," said Sahil Vachani, managing director of Max Ventures & Industries Limited.
"New York Life was our first major partner when was reinventing as a service oriented company in 2001. Hence it is very special to have them at the take off stage of Max Ventures to continue and grow our valuable relationship with New York Life," said Analjit Singh, founder & chairman emeritus of Max Group and chairman of Max Ventures. New York Life had partnered with Max Group to form Max New York Life Insurance Company Limited with 26 per cent ownership. The American insurance behemoth sold its stake to Mitsui Sumitomo Insurance Company Limited of Japan in 2012. New York Life Insurance is already holding 1.93 per cent stake in Max Ventures that will dilute to 1.4 per cent on the expanded capital. After the fresh round of infusion, the US major will have nearly 24 per cent stake in the Indian venture. The company has now created four distinct business verticals - Max Speciality Films (manufacturing), Max Estates (real Estates), Max Learning (Education), and Max I (a fully owned special purpose vehicle to facilitate intellectual & financial capital to promising and proven early - stage organizations across identified sunrise sectors). Max Ventures reported a turnover of Rs about Rs 800 crore last fiscal with operating profit of about Rs 80 crore. It is primarily engaged in manufacturing of speciality film. The company is now looking at other areas such education and real estate that will start contributing revenues and profit in the next couple of years.