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Two private equity funds managed by leading global investment and asset manager Goldman Sachs (GS), which had a combined 15.6 per cent stake in the Max Group, have completely exited the group recently, said industry sources. Two of its subsidiaries, Xenok Ltd and GS Mace Holdings, sold the final tranche of shares 10 days ago. Sources said the investment arms of GS had initiated their exit from the Max Group last year, with sales of shares of Max Ventures and Investments, followed by Max Financial Services last month and concluded with its stake sale in Max India 10 days ago. In FY11, the GS funds had invested Rs 831 crore in the group. In FY17, Max India had demerged into three companies — Max Financial Services, Max India and Max Ventures and Industries. According to data, the GS funds exited with four times returns or 25 per cent compounded annual growth rate. While GS has fully exited, other investors such as International Finance Corporation (IFC) and KKR have only partly divested their stake in the group.
However, IFC has pruned its stake significantly from 7.5 per cent invested in 2007-08 to a negligible stake now.When contacted, Mohit Talwar, managing director, Max Financial Services and managing director, Max India confirmed the development. “Max Group has fostered deep and long-standing strategic partnerships with multiple global investors, including Goldman Sachs, Warburg Pincus, IFC and KKR, among others. Some of them, such as Goldman Sachs and Warburg Pincus have fully exited the Max Group after completing seven years, making impressive returns in the process,” Talwar said. KKR had entered the Max Group in FY16 and continues to be invested. With the exit of GS and the partial exit of KKR from Max Financial, the Max Group has added a host other key institutional investors, including Wastach, Ward Ferry, GIC Singapore, Target Asset Management, Nomura and Morgan Stanley. Goldman Sachs’ exit from the group comes at a time when a number of leading private equity players have partially or fully exited their investments with handsome profits, especially during initial public offerings. At the same time, a large number of new players have also entered the fray. Earlier in the year, RBL Bank saw partial exits by Capital and Capvent India. More recently, the public issue of AU Finance saw stake sales by Kedara Capital, IFC and ChrysCapital.