MAXF with board approval has agreed to swap MSI’s 19.98% stake in Max Life for 21.45%in MAXF with fresh issue of shares leading to MAXF holding increase to 91.77% from 71.79% currently. With time it will also acquire the balance stake from MSI at same price and move holding close to 100% which will reduce structure complexity, while will provide MSI access to listed entity. We can speculate this structure is being carried to collapse holding & operating co structure and get life insurance listed and also can be done for a strategic investor to take larger holding and should augur well going ahead. Although challenges are promoter pledge of 80% and acquisition part stake from MSI & Axis will have to be closely looked (will be no share swap). Key parameters remain on track with business growth of 23% with improving margins towards 20-21% and 16% protection mix.
Structure changes at holdco: MSI swap of ~20% stake in life for 21.5% in MAXF was at price of Rs421.7 and valuing per share value of Life business at Rs80.9, offsetting any cash transaction and issue fresh shares which will lead to MAXF stake increase to 91.8%. The balance 5.24% stake can be taken in next 12M (also earlier than 12M) with put/call option to respective entity. Importantly, balance stake can be taken at same price of current deal but management mentioned acquisition will be done with various options. Although, MAXF mentioned MSI will continue to stay, swap arrangement leads to exit option for MSI or collapse of structure or to speculate selling stake to a strategic investor at MAXF level with simplified structure and 100% holding -- Kindly email stock reports at [email protected] For sharing knowledge -- NIFTYVIEWS.COM NOW A FREE OPEN SOURCE WEBSITE. http://www.niftyviews.com/ Disclaimer :- "The opinions expressed by the members on this board are based on their individual experience and perceptions and to share information with other members with the best of intentions to help fellow members in investment decisions as equity investment is a risky venture.The administrator of www.Niftyviews.com just provide a platform for the authors to express their opinion and take no guarantee for the genuineness of the same."ANY member of this forum doesnt prepare or publish any research report; or ii. provide research report; or iii. make 'buy/sell/hold' recommendation; or iv. give price target; --- You received this message because you are subscribed to the Google Groups "Niftyviews.com" group. To unsubscribe from this group and stop receiving emails from it, send an email to [email protected]. To view this discussion on the web, visit https://groups.google.com/d/msgid/stockresearcher/CAHgtNZygRLfwtJ85yn8JV5ay8TEDvkei4HAP%2B6%3DCb73DVHLUjQ%40mail.gmail.com.
