Analjit Singh, promoter of Max India, is stepping down from the position of managing director, while remaining chairman.
The board of directors met on Wednesday and approved Rahul Khosla as MD, effective August 18.
Khosla, a professional and unrelated to the promoter family, has a wealth of experience in banking and insurance. He is to join Max from Visa, where he is group head of products for Asia-Pacific, Central Europe, West Asia and Africa markets.
Max India is the holding company for Max New York Life, Max Bupa Health Insurance and Max Healthcare.
Its consolidated revenue was Rs 7,900 crore in the last financial year. About 80 per cent came from the insurance business and about 10 per cent from healthcare.
Singh said he took this step to ensure operational functions of the group were handled by a professional, who would help it more than double revenue in five years and improve profitability.
"It is a business move. It is a voluntary choice of how I want to spend my business life and it is a succession plan to indicate that the managing director or the person at the helm of affairs of this company will not be or not necessarily be a family person and will be Rahul," he said.
Adding: "It is momentous, a landmark. In companies where families have a significant, single largest shareholding, it is not the typical pattern...typically, this position is occupied by somebody from within the family."
Singh started business under the Max group after the late Bhai Mohan Singh divided the assets among his three sons -- Parvinder, Manjit and Analjit -- in 1990.
He had sold his stake in telecom firm Hutchison Max to Hong Kong-based tycoon Li Ka-shing in 1998.
"It is part of our momentum of institutionalising the company.
"Two years ago, we started our journey into a board-governed company.... So, this is one more step and maybe a very large final step in that direction...To get the management of the board-governed company in the hands of a younger, more able, more experienced manager," he said.
Singh has three children -- Piya, Veer and Tara -- engaged in various other start-up businesses.
He said he was not looking at them taking up an operational role at Max India anytime soon.
"If they ever have anything directly to do with Max India, it could be in a board role but not in an operating role. So, in that sense, it is a succession towards Rahul ...To use the normal language, the future MD of Max India will be a professional and not a family member," he said.
Image: Analjit Singh