Star Health IPO: Star Health and Alliance Insurance Company, one of the many firms where ace investor Rakesh Jhunjhunwala has stake, is set to open its maiden Initial Public Offering, or IPO, on November 30, Tuesday. The move comes as the craze to float public offers continues to take over Indian companies, given the successful run of most firms in the area. Star Health IPO is the last of its kind to be floated among the 10 more offers that preceded it. These include companies such as online beauty platform Nykaa and One97 Communications, which owns digital payments firm Paytm.
Here is a list of 10 key things you should know before subscribing to Rakesh Jhunjhunwala-backed Star Health IPO
– IPO Dates: The Star Health IPO is set to open on November 30, Tuesday and have a three-day bidding process. The offer will close on December 2, Thursday, after the procedure.
– IPO Price: Star Health and Alliance Company, backed by Rakesh Jhujhunwala, Safecorp Investments India and Westbridge, has already announced the price band of the IPO. The price has been fixed at Rs 870-900 for one share, the company has announced.
– Offer Details: Star Health plans to raise Rs 7,249 crore through the offer at the upper end of the price band. The company through the OFS part will look to raise an offer size of Rs 5,249 crore during the three-day bidding process.
The shareholders like promoters Safecrop Investments India LLP, KONARK Trust & MMPL Trust are set to offload their shares during the offer for sale of the public offer. APIS Growth 6, MIO IV Star, MIO Star, University of Notre Dame DU LAC, ROC Capital Pty Limited, Venkatasamy Jagannathan, Sai Satish and Berjis Minoo Desai are also set to sell off some of their share parts in the company through the offer for sale.
– Reserved Portion: The company has reserved shares worth Rs 100 crore for its employees. Apart from this, 75 per cent of the shares has been reserved for qualified institutional buyers, while non institutional buyers have been allotted 15 per cent of the shares. The remaining 10 per cent is reserved for retail buyers.
– Objectives of Issue: Star Health IPO aims to utilise the net proceeds to augment the company’s capital base and maintain insolvency level of the company.
– Key Strengths: Star Health and Allied Insurance company is the largest private health insurance company in India with leadership in the attractive retail health segment, with an experienced senior management team and strong sponsorship. It is one of the largest and well spread distribution networks in the health insurance industry and has an integrated ecosystem that enables to continue to access the growing retail health insurance market.
– Star Health IPO GMP: At the grey market on Monday, Star Health IPO was fetching a premium of Rs 10, against the the upper band of the issue price of Rs 900. A healthy GMP often indicates how the shares would do at the time of listing.
– Company Financials: Over FY19-21, Start Health has reported a rapid growth in the business, but its profitability was mainly impacted by higher claims arising from the COVID-19 pandemic. On the back of 27.5 per cent CAGR growth in the number of policies issued, the company has reported 31.4 per cent CAGR increase in gross premiums, which stood at Rs. 9,349 crore in FY21.
– Promoters to the Company: At present, Safecrop Investments India LLP has a 47.77 per cent stake to the company. On the other hand, ace investor Rakesh Jhunjhunwala and his wife Rekha Jhunjhunwala hold 14.98 per and 3.23 per cent stake at Star Health respectively. Promoters currently hold 66.22 per cent stake in the company and post-IPO this will come down to 58.30 per cent. Public holding will increase from current 33.78 per cent to 41.70 per cent.
– Company Details: Star Health and Allied Insurance Company Ltd was incorporated in 2006, and is a Chennai-based firm. It is one of the largest private health insurers in India with a market share of 15.8 per cent in Fiscal 2021. The company primarily focuses on the retail health market segment. It offers a range of flexible and comprehensive coverage options for retail health, group health, personal accident, and overseas travel.
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