GIC expands India BFSI portfolio with bet on Max Financial

 GIC expands India BFSI portfolio with bet on Max Financial

Singapore sovereign wealth fund GIC Pte Ltd has picked up a minority stake in Max Financial Services Ltd, which operates India’s largest non-bank private life insurer Max Life Insurance Co Ltd.

GIC bought a 1.75% stake in Max Financial for Rs 601.34 crore (about $81.2 million). It purchased the shares from Max Financial’s promoter group firm Max Ventures Investment Holdings Pvt. Ltd, stock-exchange data showed.

GIC is the most active sovereign wealth fund in India, and invests in both publicly listed and privately held companies. Its most recent public market bets have been on auto-parts maker Sona BLW Precision Forgings Ltd and agrochemicals company Dhanuka Agritech.

In the banking, financial services and insurance (BFSI) sector, GIC has invested in AU Small Finance Bank and SBI Life Insurance this year. Other BFSI companies in its portfolio include shadow bank Bajaj Finance Ltd and mortgage lender Can Fin Homes Ltd.

The latest transaction was part of a deal where Analjit Singh-led Max Ventures sold shares worth Rs 783 crore. The group will use the proceeds from the stake sale to release shares pledged by Max Ventures and bring down personal debt.

After the sale, Max Ventures’ stake has reduced to 15.12%. The overall promoter holding has diluted to 15.25% from 16.99% at the end of March.

Shares of Max Financial declined 1.7% on the BSE on Thursday to close at Rs 1,004.80 apiece.

In August last year, Singh had sold a part of his holding for Rs 350 crore. The $3 billion Max Group had also divested some private real estate in the UK and monetized its residual stake in Max Healthcare to reduce its debt.

Max Financial is the holding company of Max Life Insurance. It earlier owned 72.5% of Max Life while Japan’s Mitsui Sumitomo Insurance held 25.5%. Earlier this year, it completed a deal where Mitsui Sumitomo swapped its stake in Max Life with a stake in Max Financial. Subsequently, Axis Bank picked up a stake in Max Life.

Axis Bank has now become a co-promoter of Max Life with a 12.99% stake. It has the right to acquire another 7% stake in the insurer. Mitsubishi Sumitomo retains a residual stake of 5.17%, which Max Financial will buy.

Ankit Doshi

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