Max India board approved Rs 650 cr rights issue

NEW DELHI: Insurance and healthcare firm Max India will raise upto Rs 650 crore through a rights issue of shares and also plans to raise additional funds through issue of warrants for its expansion plans, the company announced on Tuesday. Those shareholders who subscribe to the rights issue will also have the option of subscribing the warrants. This is the second round of funding in three years.

In mid-2007, the company had raised Rs 1,000 crore through the qualified institutional placement (QIP) route. Last week the company had said it plans to raise around Rs 1,000 crore for proposed investments and was looking at various alternative routes to raise the money.

In a statement issued on Tuesday, the company said: The company s board has approved to issue equity shares at a face value of Rs 2 each for an amount not exceeding Rs 650 crore. In addition, the company will also issue detachable warrants, each convertible into equity share of Rs 2 attached to each equity shares. The price and other details of the rights and warrants issue will be decided by the company at a later date.

A large part of the money would be used to expand Max New York Life, the group s insurance business. Indian law requires insurance companies to keep aside funds as security money also called solvency margin . MNYL is a joint venture between Max India and US-based New York Life in which the company holds a majority 74% stake.