Max group's Analjit Singh plans to sell stake, real estate to repay loans

Max group promoter also plans to sell some real estate assets to repay loans it had raised through the pledging of promoter shares

Max group promoter Analjit Singh has put together a plan to sell a minority stake in Max Financial Services (MFSL), the holding company of Max Life, as well as some real estate assets to repay loans it had raised through the pledging of promoter shares in two listed companies. According to merchant banking sources, the process is expected to be completed in four to six months. 

The promoters have, however, decided not to sell off or merge the life insurance business with a strategic investor as they nearly did a few years ago. Max Life’s proposed merger with HDFC Life was called off in July 2017. 

Singh is also planning to sell 5 per cent of his 12 per cent stake in the entity formed after the merger of KKR-backed Radiant Life Care and Max Healthcare, which will run the hospital business. 

As of January 31, 2019, the promoters pledged 75.59 per cent of their stake in MFSL and 73.55 per cent in Max India (MIL), the holding company of its healthcare, health insurance and senior living businesses, to the lenders. The promoters control over 28.3 per cent in MFSL and 40.96 per cent in MIL. 

The $3-billion group might also consider selling off its specialty films business in which it has a 49 per cent stake.   

Singh, who earlier decided to play only a mentoring role in the group and withdrew from the boards of his companies, is set to play an active role again by re-entering as non-executive chairman in MFSL as well as Max India, sources in the know said. He will also become group chairman, as against the current designation of chairman emeritus. 

The promoters, who recently sold their 51 per stake in health insurance firm Max Bupa to True North, will now concentrate on insurance, real estate, hospitality and another new business, which is still to be finalised. 

As part of a succession plan, said the sources, only Singh’s daughter Tara (who runs senior-living business Antara) and son-in-law Sahil Vachani will represent the family on the boards of group companies. Singh has four children, which include daughter Piya and son Veer who run a wellness retreat separately. The two siblings have declined any interest in being on the group firms’ boards, they said. 

A spokesperson for the Max group declined to comment on any of these issues.

Currently, Tara is on the board of Max India, while Vachani was inducted into the MFSL board a few months ago as part of the restructuring. Analjit Singh took over as non-executive chairman of MFSL a few months ago, replacing Naina Lal Kidwai, who is still a non-executive director. He is expected to do the same in Max India in April, replacing current Chairman Rahul Khosla. 

According to sources, the main reason for Singh again taking an active role is a feeling among investors and stakeholders that there should be representatives from the family on the boards, especially when they have substantial stakes to oversee the overall running of companies.

The group is making an aggressive push in real estate and is already under various stages of developing over 1.3 million square feet of space in Delhi-NCR. It is also scouting for more land parcels in the region. Also after testing the hospitality business in South Africa, plans are on to expand the business. Currently, Singh runs three boutique hotels in South Africa under the Leeu brand. It also has a hotel in the UK and is opening another one in Florence, Italy.