Star Health and Allied Insurance Company’s initial public offering (IPO) will close on Thursday, December 2. Investors have the last chance to book the inaugural offer. Backed by seasoned investor Rakesh Jhunjhunwala, Star Health and Allied Insurance is the first purely Indian health insurance company. The company has set the price range at Rs 870 – 900 per share. Star Health’s IPO included a new issue of Rs 2,000 crore and an offer to sell (OFS) equity worth Rs 5,249 crore (5.8 crore of shares) by the promoters and existing shareholders. Interested investors can bid in multiples of 16 units. The company will not receive any proceeds from OFS of the issue. The net proceeds of Star Health and Allied Insurance Company’s IPO will be used to increase the capital base, thereby maintaining the solvency levels of the company.
Star Health and Allied Insurance Company IPO Rating and Subscription Status
The IPO is valued at 14.9 times the FY21 book value, which appears to be a
premium over ICICI Lombard and New India Assurance, which, among
the space listed is present in the health insurance sector. So, most brokerages have recommended that you go with Star Health’s IPO with caution and for long-term gain.
Star Health’s IPO was 20 percent underwritten on the second day of the tender, backed by retail investors. The majority of the offers came from retail investors, who only have a 10 percent quota in the IPO versus 35 percent. The company said earlier that it had raised just over 3,217 crore yen from key investors ahead of its IPO.
Star Health and Allied Insurance IPO Gray Market Premium:
Star Health’s gray market premium was listed at Rs 15 on December 2, according to IPO Watch. Unlisted shares of Star Health and Allied Insurance were trading at Rs 150 on November 24 on the gray market. However, the BPF of Star Health and Allied Insurance’s IPO has declined significantly over the past week.
Star Health and Allied Insurance IPO: Company Profile
Established in 2006, Star Health and Allied Insurance Company Ltd (Star Health) is one of the largest private health insurers in India with a 15.8% market share in fiscal year 2021. The company is focused primarily in the retail healthcare market segment. It offers a range of flexible and comprehensive coverage options for retail health, group health, personal accident and overseas travel, accounting for 87.9 percent, 10.5 percent, 1, 6 percent and 0.01 percent of the written gross total. Prime (GWP) during fiscal year 2021. As of September 30, 2021, its distribution network includes 779 health insurance branches in 25 states and 5 Union territories in India. Star Health has also built one of the largest hospital health insurance networks in India with over 11,778 hospitals.
Star Health and Allied Insurance IPO: Should You Subscribe?
“Due to the covid pandemic, awareness in the health insurance industry has increased and the retail healthcare market segment is expected to become a key growth engine for the entire health insurance industry in India. The health insurance industry has a strong positive outlook and as there are only two listed general insurance companies in India, ICICI Lombard and New India Insurance, we believe Star Health is a good option for long-term investing. term, ”said Ravi Singh, head of research. and vice president of ShareIndia.
“Star Health sets itself apart from other independent health insurers (SAHIs) in terms of size, high growth rates (32% CAGR of gross written premiums in fiscal year 18-21) and better operational performance which is reflected in pre-Covid figures for the company (93 percentage combined). The valuations ordered by Star Health at 5.5x FY21 Mcap / GWP, are in line with recent agreements in the SAHI space and appear fair given its positioning. Therefore, we recommend that you only subscribe from a long-term perspective, ”said Amarjeet Maurya – AVP – mid caps, Angel One Ltd.
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