If a stock gains after announcement of a merger, when the merger is called off it should tank, logically speaking, but by how much? In the case of Max Financial Services, from the time rumours about its potential merger with HDFC Standard Life surfaced in June 2016 to a couple of weeks after the official announcement on August 8, 2016, the stock gained a whopping 62%. The stock continued to scale new highs all the way till May 2017 when rumours about the deal not cutting ice with the regulator emerged. Over the next few months till July this year when the official announcement came through, the stock lost only a third of its gain triggered by the merger news. Not withstanding a failed deal, the stock is on a roll.
Riding the optimism Rahul Khosla, executive president of Max Fi