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Chennai: The International Finance Corporation (IFC) has decided to pick up 4.4% stake in Max India Ltd for a consideration of $30 million (Rs 150 crore).
The investment arm of the World Bank will be subscribing 1,03,26,311 equity shares, of Rs 2 each, with a premium of Rs 143.26 a share on the expanded paid-up capital on a preferential basis. The company had called for an EGM on Friday to ratify the same.
Max India will part finance the proposed funds from IFC towards setting up of two new greenfield hospitals in and around Noida under its healthcare subsidiary, Max Healthcare India Ltd (MHIL), apart from using it for the expansion of MHIL’s existing hospitals at NCR (National Capital Region).
Max Healthcare has embarked upon Rs 500-crore expansion-cum-greenfield projects at the northern region, market sources said. Max Healthcare is already a client of IFC.
According to sources, the proposed greenfield projects are expected to come up in Shalimar Bagh and Greater Noida, where MHIL is successfully operating and is witnessing strong demand for its services. Once complete, the project is expected to take MHIL’s total bed capacity to 2,000 as against 1,200 to 1,300 now. MHIL has earmarked a total capital expenditure of Rs 500 crore towards this expansion-cum-greenfield projects, sources added.
IFC’s equity investment will bring much needed capital and provide a strong signal of support to the health sector in India in general and Max Healthcare, in particular, which is experiencing difficulties raising affordable funding in the current environment. In addition, the project will also enhance the skill pool of Max Healthcare which provides education and training to a large number of people, the sources pointed out.
Currently, the promoters are holding 34.84% in Max India while institutional investors, including Warburg Pincus, are holding close to 35.42% in the company.
With a fresh issue of 1,03,26,311 shares to IFC, the paid up capital of the company has been expanded to 23,23,56,621 shares of Rs 2 each.
Post issue of shares to IFC, the promoters’ holding will come down from the current 34.84% to 33.29% and the institutional investors holding will be marginally down to 33.85% from 35.42%. Private corporate bodies will hold 4.81% and Indian public holding will be around 7.86% in the post paid-up capital, the sources said further.
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