Star Health IPO: Star Health and Allied Insurance Company Limited’s initial three-day public offering, or IPO, has already reached its day 2 on Wednesday, December 01. experts on its high valuation. The public offer therefore received a mixed reception from investors on its first day of auction. Star Health’s IPO at the end of the day on the first day received offers for 53.19 lakh shares against an IPO size of 4.49 crore of shares. Star Health previously revealed that it raised just over Rs 3,217 crore from key investors before opening the show to the public. Star Health’s IPO is the first to close the auction in December.
Details and objectives of Star Health’s IPO offering
Star Health and Alliance Company Limited are backed by leading investor Rakesh Jhunjhunwala, Safecorp Investments India and Westbridge. The company plans to raise Rs 7,249 crore from its first public issue, which consists of a new issue and an offer to sell. Of this amount, 5,249 crore rupees are expected to be collected through the OFS, in which 58,324,225 shares will be sold by existing shareholders and promoters. The remaining 2,000 crore will be a new problem.
The price range for Star Health’s IPO has been set at Rs 870-900 per share, the company said earlier. Investors who wish to invest in the Star Health IPO can bid on a minimum of 16 shares and in multiples of 16 shares.
Star Health’s IPO aims to use the net proceeds to increase the capital base of the company and maintain the level of insolvency of the company. The product will also be used for general corporate purposes.
Star Health IPO Subscription Status
As mentioned earlier, Star Health’s IPO was underwritten 12% or 0.12 times late Tuesday amid a lukewarm response from investors. Employees reserved 30,672 shares for Rs 100 crore of shares reserved for them, while retail investors subscribed 64% of the portion reserved for them. Non-institutional investors offered 1.38 lakh of shares of their reserved portion, while qualified institutional buyers purchased 41,648 shares of their reserved portion.
Star Health IPO BPF, Finances
Star Health IPO was getting a premium of Rs 15 on Wednesday over the higher end of the Rs 900 price range, according to IPO Watch. The low gray market premium of Star Health’s IPO indicated poor performance during Star Health’s IPO on the stock markets later in December.
In fiscal year 19-21, Start Health saw rapid business growth, but its profitability was primarily affected by the increase in claims resulting from the COVID-19 pandemic. Thanks to a 27.5% CAGR growth in the number of policies issued, the company reported a 31.4% CAGR increase in gross premiums, which stood at Rs. 9,349 crore in FY21.
Star Health IPO Review, Should You Subscribe?
HEM titles: The company carries the issue at a price range of Rs 870-900 per share at a mcap / gwp multiple of 5.5x and at a mcap / net premium multiple of 10.31 on the fiscal year 21 basis. company being the largest private health insurance company in India with leadership in the retail health segment, it has one of the largest and best distributed distribution networks in the health insurance industry and the integrated ecosystem. The company’s emphasis on risk management with domain expertise leads to a higher complaint rate and quality customer service. The company’s substantial investment in innovative technology and business processes has demonstrated superior operational and financial performance. But given market conditions and volatile valuations, we recommend “subscribing” to the show for long-term purposes.
Religare Broking: Star Health is expected to benefit from positive industry growth trends given its leadership position in the attractive retail health segment. It has one of the largest and most extensive distribution networks in the health insurance industry and an integrated ecosystem. It offers a range of flexible and comprehensive covers. The financial performance of the company was affected in fiscal year 21 due to the pandemic. Going forward, it intends to strengthen its market leadership by leveraging its strong brand. It aims to enhance existing distribution channels and develop alternative channels. It also intends to focus on product innovation and provide value-added services. In addition, investments in digitalization would help the company to achieve higher operational efficiency and better customer service.
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