Goldman Sachs invests $115m in Max India

GS Capital Partners, the private equity unit of US bank Goldman Sachs, has invested $115 million for a stake of 9.4 percent in Max India.

Based in New Delhi and listed on the Bombay Stock Exchange, Max India primarily provides life insurance and healthcare services. Its business lines also include clinical research, nurse staffing and the manufacture of plastic products.

GS Capital Partners’ investment takes the form of fully and compulsory convertible debentures, which carry a coupon rate of 12 percent annually. In 15 months, the debentures can be converted to company shares at INR216.75 ($4.66; €3.26) per share, according to a Max India statement. It also gives the firm a board seat, although it will not have any affirmative rights, the statement noted.

Max India’s shares rose 2 percent to INR227.35 on the news. At time of press, the company was trading at INR226.50.

The capital will be used to finance the expansion of Max India’s life insurance, healthcare and health insurance business, including Max New York Life, a joint venture between the company and US insurer New York Life, Max Healthcare and Max Bupa.

The investment was made from GS Capital Partners VI, a global fund which closed on $20.3 billion in 2007, a Goldman Sachs spokesman told PEI Asia. The fund typically invests between $200 million and $800 million per deal in the Americas, Europe and Asia. In May 2009, the firm sought approval from the fund’s LPs to invest half of its $9 billion in uninvested capital in distressed investments and securities. Another $1.5 billion would go to portfolio companies it already owns and the remaining $3 billion would go to new deals, the firm said at the time.

GS Capital Partners is not the first private equity investor to target Max India. In 2004, US firm Warburg Pincus made a growth investment in the company.