Managing Director's Letter

Dear Shareholders,


It is a pleasure to welcome you to yet another year in the journey of your Company Max Ventures and Industries Limited (MaxVIL). In the past, I have spoken about how MaxVIL represents the Max of an earlier era and how we aim to recreate its success in establishing and scaling up world class businesses that redefine their category and, in turn, create value for its stakeholders. I am pleased to share that FY 2018 was a year when we took several nascent, but significant steps to move forward in that direction.


One of the most significant of these was our recently concluded Rights Issue. I believe that the issue was a key transaction for our company and reflects our commitment to rapidly growing our real estate portfolio. As our Chairman has already highlighted, the proceeds from the Rights Issue will be used specifically for Max Estates’ key upcoming projects – Max Towers, a premium commercial space on the Delhi-Noida Direct flyway and the redevelopment of Max House in Okhla, New Delhi.

It is heartening that the Rights Issue was a greatsuccess with participation from new Anchor Investors from India and abroad. I am pleased to share that the Sponsor Group, led by our Chairman Mr. Analjit Singh, also increased their shareholding from ~38% to ~48%

through the Rights Issue. The increase in the Sponsors’ shareholding represents their unwavering commitment to the Company, and more specifically, their confidence in the immense growth prospects of its underlying businesses.

MaxVIL commenced its journey in an entirely new and evolved socio-economic context. The New India is increasingly aspirational. At MaxVIL, we have consciously created businesses that cater to this aspiration and desire in the minds of the consumer, through our business verticals Max Estates – Premium Real Estate, Max Speciality Films – Packaging Films, and Max I. – Investments.

With specialized teams and leaders in place, a clear vision and financial bandwidth for growth in each of our businesses, we are confident of delivering a truly unique experience to consumers – a hallmark of Brand Max.

MaxVIL commenced its journey in an entirely new and evolved socio-economic context. The New India is increasingly aspirational. At MaxVIL, we have consciously created businesses that cater to this aspiration and desire in the minds of the consumer, through our business verticals Max Estates – Premium Real Estate, Max Speciality Films – Packaging Films, and Max I. – Investments.

Allow me to briefly touch upon our various businesses and the progress made in each one of them so far.

  • Max Estates is our real estate business aimed at creating a portfolio of ‘Landmark addresses’. The focus in this business is very clear – to create a large portfolio of ‘Commercial Annuity’ based Real Estate projects. These commercial developments will act as a platform to build upon areas of residential development through a capex light strategy.

    With this focus, Max Estates is currently in the process of delivering its first three projects.

    • Max Towers – a next generation office building which aims to redefine the ‘Future of Work’. With a premium location on the edge of South Delhi connected with the Delhi-Noida Direct flyway, this luxury tower offers a strategic value proposition. This landmark project has already commences leasing, and is expected to complete in FY2019.

    • 222 Rajpur, Dehradun – a project with bespoke luxury villas spread across 5 acres with a limited inventory of 22 residences. This project was delivered before time in FY2018 with no escalations. Even more heartening is the fact that we have sold 50% of the inventory in the project and are on course to sell the balance within FY2019.

    • Max House, Okhla is our second commercial real estate project in a prime South Delhi location. This is a redevelopment project, which will accommodate the offices of the Max Group and other third-party tenants, utilizing a potential built-up area of around 200,000 square feet. It is expected to commence construction in FY2019.

With the above three projects underway, our real estate investment stands at ₹ 429 crore with an equity investment of ₹ 58 crore, Compulsory Convertible Debentures of ₹ 293 Crores and debt investment of ₹ 78 crore as on August 10, 2018.

In our short journey of 3 years, we have almost completed a lifecycle of projects, turned around a distressed project by obtaining the necessary regulatory approvals, successfully completed project finance, project design and execution and are currently in the process of marketing and sales for our current set of properties.

With this strategy in place, we have successfully commissioned our 5th manufacturing line of BOPP films in May 2018 increasing our capacity from 46.35 KTPA to 80.85 KTPA.

II. Max Speciality Films Limited (MSFL) is Max Group’s legacy manufacturing business and is a strategic partnership with Japan’s Toppan Printing Co. Ltd. in which the Company holds 51%. Our aim for Max Speciality films is to create a leadership product portfolio leveraging our strong R&D skills and innovation DNA, paired with Toppan’s expertise in managing a global specialty films business, technology transfer and their global sales network.

Over the past several years, MSFL has successfully created a widely respected brand with a portfolio of marquee clients such as HUL, Pepsico, Modelez and ITC, and innovation leaders in their own space. We provide solutions that not only enhance the product but also redefine premium, frequently winning multiple national and international awards for our path-breaking products.

Now with the added benefit of our collaboration with Toppan Group, we expect to play to the Indian advantage of good quality products with competitive prices in international markets. With this strategy in place, we have successfully commissioned our 5th manufacturing line of BOPP films in May 2018 increasing our capacity from 46.35 KTPA to 80.85 KTPA. MSFL’s Line 5 is designed to meet trends for recyclability, ultrahigh barriers and print receptivity. The line will be able to manufacture thicker films with advanced properties making it environment-friendly since it is conducive to recycling and reducing the usage of plastic per pack.

While both our products and industry potential are positives, the sector is currently hit with excess capacity, which has led to some pricing pressures, which coupled with increasing raw material prices, are certain to hit margins and profitability. At this point, I must note that despite all the pressures, our new line is running at almost full capacity, which speaks to our continued focus on higher quality products. We expect our superior product portfolio and domestic and global demand trends to help us tide through these challenging times.

III. Finally, Max I. is our investment vertical, a whollyowned subsidiary which facilitates the provision of intellectual and financial capital to promising and proven early-stage organizations across identified sunrise sectors. It is aimed at offering premium experiences to the aspirational Indian through investments in young and vibrant ventures that also complement our existing lines of businesses.

While we do not have a set investment budget to deploy, we continuously evaluate opportunities that are synergistic to our businesses. So far we have invested in two key businesses. The first is Azure Hospitality, which focuses on youthful, casual and creative F & B trends is continuously strengthening its brand equity. While the industry faced some short term challenges on account of demonetization and GST in 2017, growth is expected to pick up soon with expansions planned from increasing the number of outlets from 30 to 46 over the next 12-18 months. With brands such as Mamagoto, Mamapaati, Dhaba, Rollmall becoming more popular, we expect Azure to play an important role in our F&B offerings for our commercial real estate projects as well.

The second, Nykaa is India’s leading premium beauty destination is growing leaps and bounds. With a strong leadership at the helm of affairs, the Max I.’s investment in Nykaa has turned a very profitable venture. We made our 1st profit in this vertical by selling ~50% of our stake at 100% profit in a span of less than 18 months.

At this juncture, we have committed to invest ₹ 2.5 crore in a venture fund with the aim of further leveraging our expertise in the space of early investing in India.

In the coming months, MaxVIL will continue to evaluate growth bets in all its businesses while also accelerating progress in existing projects. With a strong and highly qualified Board of Directors and a skilled and competent team of specialized professionals MaxVIL is poised for greater successes in the years to come.

I am deeply grateful for your ongoing trust in our Company and I sincerely hope you will accompany us through this wondrous journey of building an enterprise that does the New India proud.

Warm regards,

Sahil Vachani

Managing Director and CEO Max Ventures and Industries Limited