Max India

HC has approved Max India demerger into three companies for which the date of demerger is set to be announced in January. Seems like value unlocking about to happen with first listed life insurance, a health insurance and speciality films companies set to be demerged. You will get 1:1 share each of the Life insurance, healthcare and health insurance and 5:1 share of max ventures which is the speciality films business.

Promoters have already shown intent on buying 34% using buyback option to make it 75% in the Max ventures company.

Seems like a good opportunity to invest and gain. What do you guys think?

 

https://www.business-standard.com/a...-hdfc-life-boards-approve-116061700341_1.html

 

Stock is shooting up today (10%) but it is not much up since the HC order so it appears markets has not cheered move. I have not seen any research report also on the topic or anything in newspapers why there is value unlocking going to happen.

 

HDFC Life, Max Life merger will create good synergy towards both companies: Daljeet Singh Kohli, IndiaNivesh

ET Now: It is official that HDFC Life and Max Life are coming together. Give us your sense on what this means, because this comes in on the heels of HDFC Life's impending IPO.

Daljeet Singh Kohli: This is very positive for Max as such, because they will be going into with a very large company, so ultimately merge entity will become more than 10% shareholder in the private sector in the entire insurance sector will be around 20% so which will probab ..

Read more at:
https://economictimes.indiatimes.com/articleshow/52794518.cms

 

Max Financial Services Reco: Hold

Stock Update

Merger is positive but it is priced in; downgrade to Hold

HDFC Life and Max Life to merge: H DFC Life a nd M ax Life Insurance (MLI) have
announced that they are planning to merge their respective life insurance businesses.
The move, if fructifies, will create India’s biggest private life insurer. Being the first
consolidation move in the insurance industry, this may be a precursor to other such
developments going forward.

� Merged entity to be largest private player in terms of market share: If the
merger goes through, it will create the biggest private life insurer in India with
a 12.4% market share. It will still be behind the government-owned Life Insurance
Corporation (LIC) in terms of market share. LIC dominates the Rs25 lakh crore Indian
insurance industry with a ~49% market share. In a two-stage deal, MLI will first
merge with its parent company Max Financial Services (MFSL). Currently, MFSL owns
68.01% shareholding in MLI while Japan’s Mitsui Sumitomo Insurance owns ~25% and
another 5.99% is held by Axis Bank (main bancassurance partner for MLI, contributing
~50% to its total sales).

 

Think one can hold for long term@555