Goldman set to sell 15% of Max Financial Services shares in Rs 2,400-crore open market deal

MUMBAI: A private equity fund managed by Goldman Sachs is looking to sell its 15% stake in Max Financial Services in a Rs 2,400 crore deal expected through secondary market trades, generating a nearly threefold return in dollar terms on a seven-year-old investment for the Wall Street bank.

Goldman, which first invested in the Analjit Singh-promoted company in 2009, will be reaping the benefits of a stock market rally and a sharp spike in share prices after a three-way merger between Max Financial Services’ insurance business and HDFC Standard Life.

The American financial giant has hired Citigroup to manage the block trades, which are expected to happen “very soon”, two people with direct knowledge of the plan said.

Both Citigroup and Goldman declined to comment.



Interestingly, Goldman, which has a large investment banking desk in India, has hired rival Citi to manage the transaction.

Goldman’s investment banking division is facing criticism after a spoiled institutional share sale issue of Yes Bank. Goldman was the lead banker to that $1 billion issue which was called off at the last moment.

Goldman’s private equity arm invested Rs 540 crore in Max in 2009 through a compulsory convertible debenture issue, and received shares of Max Financial Services at Rs 216.75 each. As on June 30, 2016, Goldman held 15.46% of it through two different entities: GS Mace Holdings and Xenok Ltd. Other major private equity investors in the company include KKR, Singapore sovereign fund Temasek Holdings and the World Bank Group’s International Finance Corp.