Star Health Insurance IPO: INR 7,500 cr IPO likely to open by November-end

Star Health and Allied Insurance Ltd began operations in 2006 as India’s first Standalone Health Insurance provider, delivering excellent health, Personal Accident, and overseas travel insurance services. Individuals, families, and businesses can all benefit from Star Health Insurance plans. 

The insurance covers medical check-ups, AYUSH medicines, critical illnesses, and hospitalisation costs. Additionally, coronavirus coverage is now also available through Star Health Insurance plans. They operate directly with customers and through various channels such as agents, brokers, and the internet. Star Health is also heavily involved in bancassurance, with long-standing relationships with several banks.

Star Health Financial Chart

Below are the important points about Star Health Financials. 

• Star Health underwrote a gross written premium of Rs. 6865 Crore during the fiscal year 2019-20 and developed a promising path with a net-value of Rs. 1889 Crore as of March 31, 2020.
• According to investment banking sources, the company is expected to conduct its Rs. 7,500 Crore Star Health and Allied Insurance IPO offering in the fourth week of November. 
• After Paytm that raised Rs. 18,300 Crore and Zomato that raised Rs. 9,375 Crore, respectively, the Star Health Insurance IPO will be the third-largest in 2021.
• According to insiders, the company and bankers are planning to make November 30 the Star Health Insurance IPO listing date, although market conditions will determine the timing.

• According to reports, the offer might be priced at roughly Rs. 900 per share, valuing the country’s largest private health insurance company at around Rs. 51,000 Crore, or $7 billion.

Here is the table containing financial information about Star Health Insurance of FY21 and FY20.

	FY21 (Fig in Crore)	FY20 (Fig in Crore)	% Chg
Gross Premium	Rs. 9,349	Rs. 6,891	35.68
Net Written Premium	Rs. 7,145	Rs. 5,261	35.80
Net Earned Premium	Rs. 5,023	Rs. 4,693	7.03
Net Commission	Rs. 584	Rs. 341	71.25
Underwriting Profit	Rs. -1,332	Rs. 163	–
Operating Profit	Rs. -1,071	Rs. 361	–
Net Profit	Rs. -826	Rs. 272	–

 

• The Star Health IPO, which is backed by Rakesh Jhunjhunwala, includes a fresh issuance of Rs. 2,000 Crore and an offer for sale by existing shareholders, including promoters, of up to Rs. 5,500 Crore. 
• The net proceeds are expected to be used to help the company expand its capital base. 
• The three promoters, Konark Trust, MMPL Trust, and Safecrop Investments, are among the sellers in the offer for sale. 
• The University of Notre Dame, MIO Star, and Apis Growth, among others, will reduce their holdings as non-promoters. 
• Promoters currently possess 62.80% of the corporation, with the rest held by public shareholders. 
• Safecrop Investments India LLP owns 45.32 %, while Rakesh Jhunjhunwala, a billionaire investor, and his wife Rekha Jhunjhunwala possess 17.26 %.

Concluding Comments

Star Health Insurance IPO might soon  become the third-largest IPO in 2021 with its initial public offering. Investors should keep a keen eye on the developments as and when they come.