Shares of Max India, which made its debut on the stock markets on Thursday, dropped five per cent on the National Stock Exchange to hit the lower circuit limit at Rs 171 per share.
On the BSE exchange, the stock listed at Rs 195 and later fell five per cent from the opening price to touch a low of Rs 185.25, its lower circuit limit, on the exchange.
The company is formed as a result of a three-way merger of erstwhile Max India into Max Financial Services, Max India and Max Ventures.
The shareholders of erstwhile Max India (now renamed as Max Financial Services) were allotted one share in Max India and Max Ventures. Max India is focused on the health care business through Max Healthcare (MHC), health insurance through Max Bhupa and senior living through Anatara Senior Living.
Market players said there were a lot of pending sell orders in the exchange system, suggesting the stock might fall further. The 'fair value' for Max India, according to a note by Edelweiss, is between Rs 100 and Rs 110 per share. "Our fair value for Max India comes to around Rs 100-110/share based on 18-20 times EV/FY17E Ebitda for MHC (46 per cent stake), along with one time P/B for Max Bupa (51 per cent stake) and Antara," said the brokerage.