Max Ventures & Industries – Promoter betting big

Max Ventures and Industries Ltd (MVIL) has four business verticals – Max Speciality Films (MSF), Max Estates, Max Learning and Max I, which supports high-potential startups.

MSF is a leading manufacturer of speciality packaging films, with revenues of ₹710 crore. It manufactures flexible polymer films for applications in food, non-food, industrial packaging, and leather coating films.

MSF:
– MSF manufactures BOPP (Biaxial Oriented Polypropylene) films of differentiated quality
– MSF films are the material of choice for packaging in Europe, US and India
– The BOPP players in India enjoy significant entry barriers due to high import duty of 7.5%
– BOPP films are recyclable and have a competitive advantage over other plastic and traditional products
– Japan’s Toppan will also serve as a customer of MSF

Max Estates:
Max Estates is to offer spaces for residential and commercial use. It is currently developing two real estate projects:
– Max Towers is a 0.6 million sq ft commercial office space project located in Delhi
– 222 Rajpur is luxury residential villa project offers only 28 residential units spread across 5 acres

Max Learning:
Max Learning proposes to set up an international boarding school in the NCR region. The school would be comparable to the best residential schools in the world. A captive land bank at a prime location in the region has been identified for the project.

Max I:
– Max I invested ₹33.5 crore in Azure Hospitality, which owns and operates Mamagoto, a mid-scale restaurant chain for Indian and Chinese street food and an institutional catering service.
– Max I acquired 2% stake in online beauty retailer Nykaa.com
– Nykaa was founded by Falguni Nayar – ex MD of Kothak Mahindra Capital and wife of KKR head Sanjay Nayar

MSF’s Clients:

msf-customers

Management:
– Mr. Analjit Singh is the founder of Max Group and chairman of MVIL. He is the member of the founder executive board of ISB
– Mr. Singh was awarded the Padma Bhushan, one of India’s top civilian honours in 2011
– Mr. Singh holds an MBA from Boston University
– Mr. Sahil Vachani, CEO and MD of MVIL, has over 12 years of industry experience
– Mr. Vachani holds a Management Degree from the University of Warwick, U.K
– Mr. Ramneek Jain, CEO of MSF, has over 23 years of experience in manufacturing
– Mr. Jain was a COO of Spicer India, a subsidiary of the Anand Group
– Mr. Jain holds an Executive Management degree from MIT, Boston

Opportunity Size:
– There is a huge opportunity for growth in the new opportunity sectors such as education, real estate and technology
– Mr. Singh personally owns a large land bank in the NCR belt almost 6-7 million sq ft. MVIL can look at a possibility of undertaking real estate development jointly with sponsors
– The BOPP industry is expected to grow from current 5 lakh MT to 7.5 lakh MT by 2020
– MSF approved an investment of ₹250 Cr to increase its BOPP production capacity from 45,000 TPA to 75,000 TPA by 2018

Risks:
– Intense competition and oversupply may have an adverse impact on its business
– Any increase in raw material polypropylene cost could have an negative impact on its profitability
– Any delay in execution may have a negative impact on its business
– Need a lot of patience

Investors:
– Promoters hold 38% of the company
– Reliance Mutual Fund bought 12.5 lakh shares at ₹48
– Mr. Porinju Veliyath bought 6 lakh shares at an average price of ₹59
– New York Life invested ₹121 crore in Max Ventures at an average price of ₹78
– Japan’s Toppan Printing buys 49% stake in Max Speciality Films for ₹200 crore

 

Appendix:
Looking at significant capacity expansion over the next few years – Jun 22, 2016
Sahil Vachani, MD, MVIL speaks exclusively to CNBC-TV18 and states that the company is looking at significant capacity expansion over the next few years. Watch video: [CNBC-TV18]

New York Life Insurance invests ₹121 cr in Max Ventures – Jan 10, 2017
Sahil Vachani, MD, Max Ventures states that the company’s deal with New York Life will result in an inflow of ₹121 cr. Watch video: [CNBC-TV18]

Max Ventures in radar – Mar 6, 2017
Watch video: [ET Now]

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