Director's Letter

Dear Shareholders,

It is an honour and a privilege to present this year’s Annual Report, which is the first since your Company’s stock commenced trading in June 2016.

During this time, the stock has outperformed the NIFTY and has also fared significantly better than its peers. The stock’s rapid growth during these past 14 months stands as a proud testimony of the investors’ unceasing faith in the Company’s vision and long-term potential.

Conversely, it is also an important reminder of the high expectations our shareholders have placed on us, maintains our motivation to keep working towards maximising value for our stakeholders.

We can now confidently say that the vision with which MaxVIL was conceived is well on its way to being realised with an able leadership team in place as well as key strategic partners such as New York Life and Japan’s Toppan Group.

Before I discuss the performance of your Company this past year, allow me to recount MaxVIL’s raison d’être, and why we do what we do. MaxVIL now actively manages holdings in four operating business verticals, the first being its legacy manufacturing business Max Speciality Films Limited (MSFL). At the time of MaxVIL’s inception, it was part of our mandate to rejuvenate the manufacturing business and help differentiate it through strategic innovation and strong execution in an increasingly crowded and competitive market.

Our second operating business is Max Estates Limited. The inspiration driving the creation of this business was the significant trust deficit in the Indian property market due to poor planning, lack of attention to detail and a lamentable lack of service excellence. Our aim is to remedy this situation by putting before discerning Indians a unique real estate offering that meets the high and meticulous standards that they have come to expect from the Max brand.

The third operating business under MaxVIL is Max Learning Limited. As in real estate, there are similarly significant gaps in the global education system, both in pedagogy and in the curriculum. We see a genuine and substantial opportunity to impart an education that inculcates critical thinking, responsible citizenry, creative flair, sensitivity to the environment and a cosmopolitan outlook, all combined with an ethos and international standards of excellence.

Our fourth vertical is Max I. Limited. We strongly feel that the current government’s various initiatives have created a constructive and conducive business environment. We plan to strategically choose businesses that are aligned with the Max Group’s interests and areas of expertise and which display a demonstrable hunger and passion for growth as well as strong entrepreneurial zeal.

I must point out that this structure of MaxVIL is starkly reminiscent of the old Max India in its early days with a similar entrepreneurial spirit, hunger for growth and potential for long-term value creation. As we grow, our focus will be on building outstanding management expertise and governing mechanisms to enable us to increase our performance outputs while exercising the highest level of professionalism and integrity.

43 Cr. 
EBITDA in FY 2017


In FY 2017, MaxVIL reported consolidated operating revenues of ₹ 656 crore, primarily through our Speciality Films business. We reported an EBITDA of ₹ 43 crore during the year; a slight dip compared to the previous year on account of multiple external factors that impacted our Films business. These factors included the Government’s ‘demonetisation’ move last November, which created critical liquidity constraints for MSFL’s customers as well as vendors and disrupted cash cycles across the value chain. The other significant reasons included Brexit, or Britain’s decision to leave the European Union, which caused a rapid devaluation of the British Pound and hurt MSFL’s export earnings, and finally, overcapacity in the domestic speciality films market.

With our other three verticals in the incubation stage, MSFL is, for the moment, the primary source of revenue for the Company. At a consolidated level, we will continue to face pressure in our topline as well as on bottom line. Moreover, our numbers will likely remain under pressure for the next two-to-three years as we continue to invest in these new verticals, the revenues for which will accrue only later due to their longer gestation periods.


At MaxVIL, it has been our ambition and responsibility to lead the Max Group into the “wider world of business” to sectors where we do not currently have a presence but are strategically aligned with the Group’s larger interests. In addition to identifying our new business verticals, we have also made tangible progress in our businesses as per concrete business plans, which have been outlined below. One of the most significant developments this year was the induction of Japan’s Toppan Group as a partner and strategic investor in MSFL.

Our preliminary synergy discussions with Toppan both in India and Japan have gone well and we will continue to actively engage with them to further grow the business. The capacity expansion efforts for our new production line are also underway as per plan.

As the Chairman has rightly pointed out in his letter, this relationship is critical both for MaxVIL as well as MSFL. The capital infusion from Toppan for their 49% stake in MSFL has significantly augmented our coffers by ₹ 199 crore. Importantly, for MSFL, Toppan will serve as a strategic partner, providing expertise in managing a global specialty films business, offering technology transfer and leveraging their global sales network to grow our international business.

Our preliminary synergy discussions with Toppan both in India and Japan have gone well and we will continue to actively engage with them to further grow the business. The capacity expansion efforts for our new production line are also underway as per plan. The new line is likely to commence operation by the first quarter of the next financial year.

Finally, we welcomed Ramneek Jain as the new CEO of MSFL this July. Ramneek comes with a rich experience in Indo- Japanese joint ventures in the manufacturing space and we are excited about leveraging his capabilities to re-invigorating and re-energising the films business.

The second vertical, Max Estates, is currently developing close to one million square feet of commercial and residential space across Delhi/National Capital Region (NCR) and Dehradun, with a special focus on commercial and office spaces. Our first project, located in Dehradun, has begun construction and site development activities and has already sold nearly a fifth of its inventory. The project represents around 1,50,000 square feet of residential developable space. Phase I of the project is expected to be completed by March 2018.

Our other two key projects, namely Delhi One Max Tower in Delhi/NCR and Max House Redevelopment Project in Okhla, New Delhi, also are on track.

Max Tower, a prime commercial tower of around 6,00,000 square feet is located within the 12.5-acre Delhi One site on the Delhi- Noida border. Max Estates has already started to finance and oversee the project management of Max Towers. The funding plan for the project has been secured, with a partial investment of ₹ 90 crore coming from MaxVIL.

The second project involves redevelopment of Max House in Okhla, New Delhi. This project will accommodate the offices of the Max Group and other third-party tenants, utilising a potential built-up area of around 2,00,000 square feet. The definitive agreement with Pharmax was recently signed and approved by Max Estates Board.

Our other key developments during the year were under Max I. Limited, a wholly-owned subsidiary which facilitates the provision of intellectual and financial capital to promising and proven early-stage organisations across identified sunrise sectors.

The vertical made its first two investments in FY 2017 – ₹ 33.5 crore in Azure Hospitality Pvt. Ltd., which owns and operates successful F&B brands such as Mamagoto and Dhaba, and a 2% stake for ₹ 17.55 crore in FSN E-Commerce Ventures Pvt. Ltd, which owns and operates the leading online beauty destination

Azure Hospitality owns and operates Mamagoto, a mid-scale casual dining restaurant chain and Speedy Chow/Roll Maal, a quick service restaurant (QSR) format for Indian & Chinese street food and an Institutional Catering Service. Recently, it also added the Dhaba by Claridges chain of restaurants to its portfolio.

Founded in FY 2013, is led by Falguni Nayar, a former managing director of Kotak Mahindra Capital Investment Banking. With a topline of ₹ 250 crore in FY 2016, Nykaa has been growing rapidly and has expanded its portfolio to include physical stores as well.

In FY 2017, we also hired a Head of Investments for Max I., which will help us streamline processes and generate a steady deal flow over the coming year, while nurturing our existing portfolio companies through strategic interventions and quarterly reviews.

Finally, for our Education Vertical Max Learning, we see a huge opportunity at a global stage. There are genuine and substantial opportunities to impart an education that inculcate academic rigour along with critical thinking, responsible citizenry, resilience and strong ethical principles, creative imagination and innovation, environmental sensitivity and a cosmopolitan outlook.

K-12 schools, therefore, present a strong business opportunity in sync with the Max philosophy, especially in view of the Sponsor’s distinguished and well-acknowledged contributions to marquee educational institutions such as The Doon School, IIT Roorkee, ISB and Boston University.

Currently, we are developing a strategic business plan for Max Learning, elaborating its organisational design principles and are in the process of identifying the key capabilities required.


MaxVIL represents a new horizon in the Max Group’s journey and will serve as a fertile, innovative platform for new ideas, new projects and investments. In the coming months, MaxVIL will continue to evaluate fresh ideas in the ‘wider world of business’, while accelerating the progress of each of its four verticals.

While we do face our share of regulatory hurdles, our confidence in the current government at the Centre remains strong. One of the elements underpinning our optimism is the Real Estate (Regulation and Development) Act, 2016 (RERA), which is a welcome development. We strongly believe that it will set the path for far greater transparency in the sector and will help build buyer trust which has been eroded significantly over the past several decades. We are also proud to note that Max Estates is in compliance with RERA, which puts us on a much stronger footing compared to most other existing players in the sector.

We are also excited about the launch of the 222 Rajpur Road project in Dehradun and the leasing of Delhi One, while we continue to explore new opportunities. This year, we will stay focussed on completing these projects as per timelines.

I am pleased to share that we have rapidly progressed in building a management team across our operating companies and at the holding company level and are building bandwidth to deliver growth to our stakeholders.

I thank you for your ongoing trust in our Company and I sincerely hope you will accompany us through our journey of building an enterprise that does India proud.

Warm regards,

Sahil Vachani

Managing Director and CEO,
Max Ventures and Industries Limited