Star Health and Allied Insurance IPO - 7 Things to Know

One of the biggest issues from an Indian insurance company will soon hit the IPO market. Star Health and Allied Insurance has announced the launch of its Rs.7,249 crore IPO opening on 30-November. Here is a gist of the Star Health and Allied Insurance IPO.
 

7 things to know about Star Health and Allied Insurance IPO

1. Star Health was promoted in the year 2006 with focus on originating health insurance products. It is a leader in the health insurance space with a market share of 15.8% in India.

While retail health plans account for 89.3% of its health insurance policies sold, group policies account for the balance 10.3%.

Star Health is backed by Rakesh Jhunjhunwala, who holds nearly 20% in Star Health. The other promoter shareholders are Safecrop Investments and Westbridge AIF.

2. The company has priced the IPO in the band of Rs.870 to 900. The issue will entail a fresh issue of 2.22 crore shares which at the upper end of the price of Rs.900 would work out to Rs.2,000 crore.

In addition, there will be an offer for sale of 5,83,24,225 shares which at the upper end of the price band will be worth Rs.5,249 crore. This will take the total issue size to Rs.7,249 crore.

3. The Star Health and Allied Insurance IPO will open for subscription on 30th November and will close on 02nd December. The basis of allotment will be finalized on 07-Dec while the refunds will be initiated on 08-Dec.

The shares will be credited to demat accounts by 09-Dec and the stock will be listed on the stock exchanges on 10-Dec.

4. The minimum investment lot will be 16 shares, implying a minimum cut-off value of Rs.14,400 at the peak IPO price band.

Retail investors can apply in multiples of 1 lot and up to a maximum of 13 lots or 208 shares valued at Rs.187,200. Post issue, the promoter shareholding will come down from 66.22% to 58.42%.

5. Star Health and Allied Insurance boasts of leadership in health insurance origination and the largest network in the health insurance segment.

It also has a superior claims ratio. It services customers through a network of 779 health insurance branches and network of over 11,778 hospitals.

6. The company had made profits in FY19 and FY20, but in FY21, it reported losses of Rs.826 crore on the back of a spike in health insurance claims paid due to COVID-19.

The asset base has grown 2.72 times in the last 2 years to Rs.4,467 crore in FY21.

7. The issue has an array of lead managers including Ambit, Axis Capital, BOFA Securities, Citigroup Global, CLSA, Credit Suisse, DAM Capital, ICICI Securities, IIFL Securities, Jefferies India, Kotak Mahindra Capital and SBI Capital Markets.

KFintech Private Limited (formerly Karvy Computershare) will be the registrars to the issue.

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