Max Financial Services Limited Investor Presentation June 2020 - PowerPoint PPT Presentation

Max Financial Services Limited Investor Presentation June 2020

SECTION I  Max Financial Services

Max Group Vision “To be the most admired corporate for service excellence” • Positive social impact • Culture of Service Sevabhav • Helpfulness • Mindfulness • Expertise • Entrepreneurship Excellence • Dependability • Business performance • Transparency • Respect Credibility • Integrity • Governance 3

Max Group – Overview Max Group - Sponsors 28.3% 40.9% 49.7% Companies Holding Senior Living and Real Estate, Manufacturing Life Insurance Business & Other businesses Skilling businesses 51% 72.52%^ 100% Operating Companies 100% • Independent living - Residencies • Assisted Living - Care Homes • Homecare - Care@Home 100% 100% 100% Relatively stable, profitable and dividend Growth businesses Entrepreneurial Ventures paying 4 ^ Max Life to be 70:30 JV with Axis Bank post series of transactions

Evolution of Max Group Second wave : Group reinvented First wave: Early years, Third wave: Corporate restructuring to from a B2B conglomerate to a B2C Started with Manufacturing unlock value & Portfolio Rebalancing company (2000 – 2014) Businesses (1982 – 2000) (2015-20) Started its journey with Demerger, Wider world of businesses Reinvented itself … Shifted from B2B Manufacturing & trading through MVIL, Portfolio rebalancing, to B2C : businesses Holistic Senior care service provider : • Life Insurance: JV with NYL in 2001, new • Demerger: Spilt into 3 entities, Max Financial, • Pharma : Penicillin-based drug JV partner MSI in 2012 Max India & Max Ventures • Packaging Films : Max Speciality Films • Health Insurance: JV with Bupa in 2009 • Wider world of businesses : MVIL forays into Real Estate; NYL acquires 22.5% stake in MVIL; • Electronics: Partnered with Avnet • Healthcare: JV with LHC in 2012, LHC Toppan inducted as JV partner in Max equalize stake in 2014 invested 766 Cr • Cellular services: JV with Hutchison Speciality Films • Re-balancing Portfolio : MHC merged with • Senior Living: Launched first community • Paging services: Tie-up with Motorola Radiant to create 3 rd largest Hospital chain; in Doon in 2013 • Communication & Satellite: Comsat JV True North acquired Max’s stake (51%) in Max • Fund Raised: Warburg invested 340 Cr in Bupa for Rs 543 Cr • Printed Circuit Board: JV with Atotech 2005; 1000 Cr QIP in 2007; IFC invested • Holistic Senior care service provider: Antara • Divestment: Divested 40% stake in 450 Cr till 2009; GS invested 522 Cr in aspires to create an ecosystem for seniors Telecom business for a gain of 488 Cr 2010 offering a blend of lifecare & lifestyle products. 5

Journey of Successful Partnerships Current JV Partners Marquee Investors Past JV Partners 6

MFS – Board of Directors Former Chairman of HSBC India. Serving on the Chairman and Founder Founder and Chairman of Max Group. Awarded Independent Director Board of L&T, Cipla, Nayara Energy, Lafarage Mr. Analjit Singh with highest civilian honor, the Padma Bhushan Mrs. Naina Lal Kidwai Holicim Independent Director Currently the Chairman of Rothschild and Co, Managing Director Seasoned professional with 36 years of Sir Charles Richard India. He is a Director of the JP Morgan Asian experience in Corporate Finance and Banking Vernon Stagg Investment Trust Mr. Mohit Talwar Former CEO of HSBC Asia Pacific with 35 yrs of Seasoned professional with 37 years experience Independent Director Independent Director experience. Serving on the Board of Vedanta, with Bank of New York Mellon and Bank of Mr. Aman Mehta Mr. Jai Arya TCS, Tata Steel, Wockhardt & Godrej Consumer America CEO & Managing Director of Max Ventures and Independent Director Former IAS officer of 1977 batch and has served Director Industries Limited. Responsible for the overall Mr. D. K. Mittal the government of India in various capacities Mr. Sahil Vachani strategic vision and direction of the company 7

Max Group – Senior Management Mohit Talwar • Vice-Chairman, Max Group • Managing Director, Max India Limited • Managing Director, Max Financial Services • Vice-Chairman, Max Ventures and Industries Ltd • Chairman, Max Specialty Films Prashant Tripathy Sahil Vachani • • Managing Director & CEO, Max Life Insurance MD & CEO, Max Ventures and Industries Limited • Director in Max Financial & Max Life Insurance Tara Singh Vachani Rajit Mehta • Executive Chairman, Antara Senior Living • Managing Director& CEO, Antara Senior Living • • Director in Max India & Max Healthcare Group role to oversee Max India New Growth Initiatives and Advisor for Max Group’s Human Capital Rajender Sud Ramneek Jain • • CEO, Max Skill First Limited CEO, Max Specialty Films 8

Max Group Overview 1 USD 2.5 billion Revenues… 4 Mn Customers… 16,000 Employees… ~46 ,000 Agents 2 Strong growth trajectory even in challenging times; a resilient & diversified business model 3 Steady revenue growth and cost rationalization leads to strong financial performance 4 Well established board governance….internationally acclaimed domain experts inducted 5 Diversified ownership…..marquee investor base 6 Superior brand recall with a proven track record of service excellence 7 Strong history of entrepreneurship and nurturing successful business partnerships 9 basis FY20 numbers for conversion assumed 1 USD = INR 75

High pedigree of long-term investor base Shareholding concentrated with Marquee Investors ▪ KKR Shareholding Pattern ▪ Baron Emerging Market Fund as on 31 st Mar 20 ▪ Ward ferry ▪ New York Life Public 13.9% ▪ Vanguard Promoter ▪ Norway Government Pension Fund 28.3% ▪ Jupiter ▪ Blackrock FII- Others ▪ 23.9% Neuberger Berman ▪ KKR Eastspring 6.7% ▪ Dimension ▪ Mirae Mutual Fund Mutual Funds ▪ HDFC Mutual Fund 27.2% ▪ Reliance Mutual Fund ▪ Kotak Mutual Fund ▪ ICICI Prudential Mutual Fund Number of outstanding shares: 26.95 Cr. ▪ Aditya Birla Sunlife Mutual Fund ▪ DSP Mutual Fund 10

SECTION II  Recent Developments in Max Financial & Max Life

MSI & Axis Transaction Summary MSI Transaction ▪ Preferential allotment to MSI in MFS against swap of shares held by MSI in Max Life ▪ MFS to acquire balance 5.17% stake from MSI at Rs 85 per share for cash consideration of Rs 843 Cr ▪ Transaction expected to be completed by Jun’ 20 , subject to receipt of all regulatory approvals (DEA, IRDAI & CCI) Axis Transaction ▪ Axis Bank to acquire 29% stake in Max Life from MFS at a valuation as per Tax Book value (currently at Rs 28.62/sh^; ~ Rs 1,600 Cr) ▪ Post completion of series of transactions Max Life will be a 70:30 JV between MFS and Axis Bank ▪ This transaction brings together the 3 rd largest private bank and 4 th largest private life insurer in the country ▪ It will significantly improve Max Life’s competitive position vis a vis its Peers , including other large bank owned private life insurers ▪ Axis & Max Life had a successful business relationship with 19 lacs customers and p remium generated over Rs. 38,000 Cr ▪ This JV will govern this in the spirit of equal partnership . Max Life will have 4 directors nominated by MFS and 3 by Axis ▪ Transaction expected to be completed by Dec’ 20 , subject to receipt of all regulatory approvals (RBI, IRDAI & CCI) 12

Transaction Structure Final structure (Post completion of series of transactions Current Structure step wise detail given below ) Mitsui Max Promoter Public Max Promoter Public Sumitomo 28.31% 71.69% 56.02% 22.11% 21.87% Max Financial Max Financial (MFSL) (MFSL) Max Life Max Life (MLIC)^ (MLIC) 25.48% 1.99% 30% 72.52% 70% Mitsui Max Financial Max Financial Axis Bank Axis Bank (MFSL) Sumitomo (MFSL) ▪ Step 1: MSI to hold 21.87% stake of MFS stake in exchange of 20.57% of Max Life through a Share SWAP transaction ▪ Step 2: MFS & MSI to acquire 1% stake in Max Life from Axis in the ratio of 74: 26 ▪ Step 3: MFS to sell 29% stake in Max Life to Axis at Tax Book Value ▪ Step 4: MFS to acquire balance 5.17% stake from MSI Note: MFS Shareholding on undiluted basis 13

SECTION III  Max Life Insurance – Insurance Opportunity