New Delhi [India], Sep 15 (ANI): Max India said on Tuesday it will reward its shareholders by acquiring up to 20 per cent outstanding shares at Rs 85 per share under its capital reduction programme.

Max India, which recently relisted on the Indian bourses on August 28 after a demerger process, has a treasury corpus of over Rs 400 crore created primarily from divestment proceeds of its erstwhile subsidiary Max Bupa.

It intends to utilise up to Rs 92 crore from this corpus for the capital reduction process while the balance of Rs 300 crore plus will be used for growth and other operational expenses.

The cash out through a capital reduction process translates to a 37 per cent premium to this price.

Mohit Talwar, Vice Chairman of Max Group and Managing Director, said the company had expressed intent to reward its shareholders at the time it divested the health insurance business Max Bupa.

"This capital reduction process is a move towards that intent even though capital conservation has become important after the onset of COVID-19 induced economic slowdown. We will still have sufficient growth capital for growth and other expenses."The board of directors approved the capital reduction exercise earlier today. The proposal will also need to be approved by a special resolution of public shareholders.

It will additionally need regulatory approvals including from stock market regulator and National Company Law Tribunal in Mumbai over the next six to eight months.

After the capital reduction, Max India's outstanding shares will decrease by up to 20 per cent from 5.38 crore to 4.3 crore.

The Max Group recorded consolidated revenues of Rs 19,800 crore in FY20. It has a total customer base of 40 lakh, around 400 offices spread across India and an employee strength of more than 16,000. (ANI)