The Analjit Singh-promoted Max India Limited is raising Rs 450-550 crore through a preferential allotment to a financial investor, a
person familiar with the situation told ET. The money will be used to fund the existing businesses of the company -insurance and healthcare.
The company's board is meeting on Saturday to approve the fund raising programme. When contacted, the Max India spokesperson declined to give details about the fund raising programme.
Max India has been looking at raising funds through the equity route for quite some time. It had originally planned to mop up Rs 1,000 crore through right issue. Subsequently it changed its plan and decided to raise only Rs 400 crore through the qualified institutional placement (QIP) route. It has now finally decided to raise the money through a preferential allotment.
Max India has a market capitalisation of Rs 5,200 crore and its shares closed on Thursday at Rs 224. The company operates its main businesses of life insurance and healthcare through two subsidiaries-Max New York Life Insurance and Max Healthcare.
Besides, Max produces specialty plastic products such as niche and high barrier bi-axially oriented polypropylene (BOPP) films, thermal lamination films and leather finishing foils. The company has also tied up with Bupa to make a foray into the health insurance sector.
The life insurance business constitutes around 84% of Max's revenues with the healthcare business accounting for another 8%. Max India reported consolidated revenues of Rs 4,166 crore in the first half of the current fiscal as compared to Rs 2,245 crore to the corresponding period last fiscal.
Meanwhile, the company's consolidated losses have come down Rs 87 crore in the same period this year from Rs 268 crore in the 2008-09 fiscal.
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