Max India Ltd has sold its unit that makes polypropylene film to Germany's Treofan for Rs 540 crore ($97 million). The deal would mean it would now focus on its main business of healthcare services besides insurance.
The polypropylene film business, which is housed under the parent company, Max India, is also one of the oldest businesses of the diversified firm, which has over the years exited few and added some new businesses.
The public listed company’s two key businesses, healthcare and insurance, are subsidiaries of Max India, which in effect now becomes primarily a holding company of the different units.
Max Speciality Films has an output capacity of about 52,000 tons per annum of biaxially oriented polypropylene film (BOPP film), which is used by food packaging, consumer products and textile sectors.
The deal leaves the company with two insurance firms Max Life Insurance (life insurance) and Max Bupa (health insurance) besides Max Healthcare (hospital chain) and Max Neeman (contract research).
Max India scrip rose in early hours of trading on Tuesday but was down almost 1 per cent in mid-day trades at Rs 188.5 a share on the BSE in a flat Mumbai market. The deal was announced after market hours on Monday.
Max India is backed by investors including Goldman Sachs, IFC and Temasek. It has struck or announced a series of deals in the last one year or so. These include roping in South Africa’s Life Healthcare Group Holdings to buy 26 per cent stake in the healthcare arm for Rs 516.5 crore.
Early this year, Japan’s Mitsui Sumitomo Insurance Company Ltd said it is acquiring 26 per cent stake in Max New York Life Insurance Company Ltd for Rs 2,731 crore ($530 million), in a two-tiered transaction that would mark the exit of US-based New York Life Insurance Co from the JV. In another announcement in April, Max India said it is acquiring a group company which will develop senior home living projects. Max India will pump in Rs 240 crore ($47 million) in the firm as part of its business expansion plan.
Private equity firm Warburg Pincus has apparently exited the firm recently, having originally invested in Max India almost eight years ago.
(Edited by Prem Udayabhanu)