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KKR plans to exit Max Healthcare: Deal could be at 5% to existing share price

When contacted, KKR declined to comment on the development. On Friday, Max Healthcare’s shares closed down 2.74% at Rs 361.55 on the BSE.

As of June 2022, the company’s promoters hold a 50.64% stake, mutual funds hold 19.21% and that of foreign institutional investors was at 23.34%.
As of June 2022, the company’s promoters hold a 50.64% stake, mutual funds hold 19.21% and that of foreign institutional investors was at 23.34%.

Global investment firm KKR, the largest shareholder in Max Healthcare Institute, plans to exit the New Delhi-based hospital chain by selling its entire 27.54% stake for about Rs 9,000 crore.

The private equity giant, which holds the stake through an affiliate firm Kayak Investment, intends to sell its total 267 million shares through the deal ‘soon’. The deal, which would be at a discount of up to 5% to the current share price, is intended to be executed probably within the next fortnight, said sources close to the development.

On Saturday, certain media reports also stated that Kayak Investment was looking to sell its entire stake in the company.

“KKR’s plan is to sell the entire stake held in the company. However, this would also depend on the market interest. The PE firm hopes there would be a good interest, like previous times when it offloaded the stake,” another source said.

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When contacted, KKR declined to comment on the development. On Friday, Max Healthcare’s shares closed down 2.74% at Rs 361.55 on the BSE.
Since 2014, KKR has executed several transactions as part of the firm’s healthcare growth equity strategy.

As of June 2022, the company’s promoters hold a 50.64% stake, mutual funds hold 19.21% and that of foreign institutional investors was at 23.34%.

Non-institutional investors held a 6.61% stake, other domestic institutional investors held 0.17% and that by insurance companies stood at 0.04%, according to stock exchange data.

SBI-focused equity fund, with a 9.27% stake, is the highest public shareholder in the firm, the data showed.

As of June 2021, Kayak Investments held 456.3 million shares, totalling 47.24% stake in the firm and has been diluting its stake over the past one year. Later in September, it sold 84.4 million shares for Rs 2,956 crore through open market transactions, which were acquired by SBI Mutual Fund, HDFC Mutual Fund and Veritas Funds, amongst others. In March this year, Kayak Investment sold 10% of Max Healthcare for nearly Rs 3,300 crore.

In 2018, KKR along with Mumbai-headquartered Radiant had acquired a 49.70% stake in Max Healthcare from South Africa-based Life Healthcare Group Holdings, an equal joint venture partner in Max Healthcare Institute along with Max India, for about Rs 2,120 crore. KKR-Radiant had acquired more than 266 million shares in Max Healthcare at Rs 80 per share through the deal.

KKR’s exit plans follow its closure of a $4-billion Health Care Strategic Growth fund in January, which focused on biopharmaceutical, medical devices, healthcare services, life science tools, diagnostics, and healthcare information technology sub-sectors.

Max Healthcare Institute operates 17 facilities, with more than 3,400 beds, across the NCR Delhi, Haryana, Punjab, Uttarakhand and Maharashtra. Apart from hospitals, Max Healthcare also operates a homecare business and pathology business under brand names Max@Home and Max Labs, respectively.

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