Max India in talks to buy partner’s stake in hospital business

09 Apr 2018

Max India currently has 47.5% stake in Max Healthcare which will rise to 95% if it is successful to buy out the partner's stake.

Max India is in talks with its South African Partner, Life Healthcare Group Holdings, to buy the latter’s 47.5% stake in hospital chain Max Healthcare. The said transaction is in the range of $450-540mn as per the news sources.

Max India currently holds 49.7% stake in Max Healthcare, and it is a JV with South Africa-based Life Healthcare Group Holdings. The 5% stake is held by management executives of the company. Max India is owned by Analjit Singh and if the transaction is successful, Max India’s stake in Max Healthcare will rise to 95%.

In Dedember 2017, the Delhi government cancelled the licence of Max Hospital, Shalimar Bagh as the hospital had declared a live baby dead. Max Healthcare’ Shalimar Baug hospital has also been disallowed to take in new patients until further notice.

Max Healthcare reported 9% yoy growth in revenue to Rs2,116 Cr while EBITDA was up 37% yoy to Rs189cr. The 9MFY18 EBITDA margin was at 9.5%, a 200bps yoy improvement in the margins. The performance was partially impacted due to the Shalimar Bagh hospital closure, however Q4FY18 numbers will have a full quarter impact. Max India’s shares have tanked 44% in the past one year.

Max India has three businesses i.e. Hospital business which is Max Healthcare, insurance business i.e. Max Bupa (JV with UK’s Bupa Finance Plc) and Antara Senior Living (100% stake).

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