Star Health IPO: Opens tomorrow; find key details that investors must know before investing

Rakesh Jhunjhunwala-backed Star Health & Allied Insurance Company Limited will launch its maiden initial public offering (IPO) on Tuesday, November 30, 2021. The last date for subscribing to the public offer is Thursday, December 02, 2021.

The price band for the initial public offering has been fixed at Rs 870-900 per share. Retail investors can place a bid for a lot of 16 Equity Shares and in multiples thereof. Retail investors can invest a minimum of Rs 14,400 for a single lot, and their maximum investment would be Rs 1,87,200 for 13 lots (208 equity shares). The company is offering a discount of Rs 80 per Equity Share for Eligible Employees Category and the maximum subscription amount for the eligible employee has been fixed up to Rs 5 lakh.

The anchor book, if any, may open for a day on November 29, a day before the opening of the IPO.

Star Health aims to raise Rs 7,249.18 through the public issue that comprises fresh issuance of shares worth Rs 2,000 crore and an offer for sale (OFS) of 5.83 crore equity shares by several shareholders.

Through the OFS, promotor Safecrop Investments India LLP will be offloading 3.07 crore shares. Promoter groups Konark Trust and MMPL Trust will be diluting 1.38 Lac Shares and 9.5K shares respectively. Other shareholders that will sell equity shares through OFS include names like APIS Growth 6 will offload 76,80,371 equity shares, MIO IV Star & MIO Star will sell 41,10,652 equity shares each, University of Notre Dame DU LAC is going to sell 74,38,564 equity shares and ROC Capital Pty Limited will sell 25,09,099 equity shares.

Kotak Mahindra Capital Company Limited, Axis Capital Limited, BofA Securities India Limited, Citigroup Global Markets India Private Limited, ICICI Securities Limited, CLSA India Private Limited, Credit Suisse Securities (India) Private Limited, Jefferies India Private Limited, Ambit Private Limited, DAM Capital Advisors Limited, IIFL Securities Limited and SBI Capital Markets Limited are the book running lead managers. Axis Bank Limited is the sponsor for the issue and KFin Technologies Private Limited is the registrar for it.

Star Health is going to utilize net proceeds from fresh issues towards augmentation of its capital base and maintenance of solvency levels.

Star Health is one of the largest private health insurers in India with a market share of 15.8 per cent in the Indian health insurance market in Fiscal 2021, according to CRISIL Research. In Fiscal 2021 and the six months ended September 30, 2021, it had a total GWP of Rs 9,348.95 crore and Rs 5,069.78 crore, respectively. From being the first standalone health insurance ("SAHI") company established in India in 2006, it has grown into the largest SAHI company in the overall health insurance market in India, according to CRISIL Research. Its comprehensive health insurance product suite insured 20.5 million lives in Fiscal 2021 in retail health and group health, which accounted for 89.3 per cent and 10.7 per cent, respectively, of our total health GWP in Fiscal 2021.

Company Strengths

• Offer a comprehensive health insurance product suite & insured 20.5 million lives in Fiscal 2021 in retail health and group health, as per Company RHP.
• The products target a variety of customer segments, including individuals, families, students, senior citizens, as well as persons with pre-existing medical conditions.

Potential Risks

• Depend on the accuracy and completeness of the information provided by or on behalf of customers and counterparties.
• Pandemics, such as the recent COVID-19, and other catastrophic events, such as natural disasters could materially increase the liabilities for claims by policyholders, resulting in losses in investment portfolios.