REPORT
Title: Calculation of beta of Max Healthcare Institute Limited. and its significance.
Name of author: Monika Adhangale
Roll no:21230022534
Batch :F1
Introduction: Max Healthcare Institute Limited (“Max Healthcare”) is one of India’s largest healthcare organizations. We operate 17 healthcare facilities (3400+ beds) across the NCR Delhi, Haryana, Punjab, Uttarakhand and Maharashtra. Almost 85% of our bed capacity is in Metro/Tier 1 cities. Apart from hospitals, Max Healthcare also operates a homecare business and pathology business under brand names Max @Home and Max Labs respectively. Max @ Home offers health and wellness services at home while Max Lab provides Pathology Services outside our hospital network.
Max Healthcare is promoted and led by Abhay Soi as its Chairman and Managing director and co- promoted by KKR, the iconic Global Private equity fund.
The present amalgamated company was formed subsequent to the acquisition of 49.7% stake in erstwhile Max Healthcare Institute Limited by Radiant Life Care Pvt. Ltd. ( “Radiant”) and the amalgamation of Max Healthcare with Radiant thereafter. The amalgamated entity assumed the name Max Healthcare Institute limited. Prior to the amalgamation, Radiant was led and promoted by Abhay Soi.
Objective: To calculate the beta of Max Healthcare Institute Ltd. and its significance and to find whether this good option for the investment.
Data Collection: Data from 1st December 2021 to 30th November 2022 has been downloaded from www.nseindia.com.
Weekly returns of NIFTY 50 has been calculated using (X2-X1)/X1*100 and Weekly returns of Equity has been calculated using (Y2-Y1)/Y1*100. Weekly Returns of Equity has been regressed on Weekly returns of NIFTY.
Data Analysis:
Y(SBI Returns) = 0.352202756-0.083795x(Nifty Returns)+ E
• t-stat = 0.5433
• R2 = 0.019
• F = 0.091
• N = 51
The above equation tells us about the relationship between Nifty returns and Equity returns. The positive sign means, there is a direct relationship. If
Nifty rises, Equity will also rise and if Nifty falls Equity will also fall. The coefficient of Nifty is (0.266), which means if Nifty rises
by 1 unit then Equity will rise by 0.266 units and vice-versa.
Number of observation(N) are 49 and t-stat value is 0.969. P value for this is 0.5894, which is more than 0.05 which means (b) is not statistically significant at 5%.
R2 is 0.0195, which means 1% of Equity is explained by Nifty, balance 99% is error. Error is due to the variables which are not in the model.
F value is 0.091, the P value for which is 0.33, which is greater than 0.01, which means overall the model is not statistically significant.
Conclusion: Here the Beta value is equal to 0.266, which is less than 1, it means it is not a good investment proposal given that the Nifty rises.