Why Max Is Pricier Than Apollo

Having an edge

- Manish Joshi

Max Healthcare Institute Ltd has been in the buzz lately. On Friday, the National Stock Exchange said Max will be included in the Nifty 50 index from 30 September as a part of the semiannual index review.

When it is included, Max is likely to have more weight in the index than Apollo Hospitals Enterprise Ltd, going by its current free-float market capitalization of ₹88,000 crore versus ₹78,000 crore for the latter.

There's also Max's suspension of cashless treatment across its hospitals for Bajaj Allianz policyholders. This stems from the tussle between hospitals and general insurers over alleged over-billing of customers.

That may have dampened the positive sentiment around Max's Nifty inclusion announcement, possibly explaining the stock's initial muted reaction. Still, passively managed funds that replicate Nifty constituents will have to buy shares worth $400 million at the time of the rebalancing, as per Nuvama's estimates, though it's still some time away.