Star Health IPO sails through

Published on Dec 03, 2021 08:32

The initial public offer (IPO) of Star Health and Allied Insurance Company received bids for 3,56,02,544 shares as against 4,49,08,947 shares on offer. The issue was subscribed 79%.

The qualified institutional buyers (QIBs) category was subscribed 1.03 times. The retail individual investors category was subscribed 1.10 times.

The allotted quota of non-institutional investors and employees remained undersubscribed, at 19% and 10% subscription, respectively.

The issue opened for bidding on 30 November 2021 and it closed 2 December 2021. The price band of the IPO was fixed at Rs 870-900.

The IPO consisted of a fresh issue worth upto Rs 2,000 crore and an offer of sale (OFS) comprising 5,83,24,225 equity shares.

Ahead of the IPO, Star Health and Allied Insurance Company on 29 November 2021, finalized allocation of 3,57,45,901 equity shares to anchor investors at Rs 900 per share, aggregating to Rs 3,217.13 crore.

The company proposes to utilize the net proceeds towards augmentation of its capital base and maintenance of solvency levels. Further, the company expects to receive the benefits of listing of the equity shares, including to enhance visibility and brand image among existing and potential customers.

Star Health and Allied Insurance Company is the largest private health insurer in India with a market share of 15.8% in the Indian health insurance market in FY2021 in terms of Gross Written Premium (GWP). The company was the first standalone health insurance company established in India in 2006.

With the comprehensive health insurance product suite, the company insured 20.5 million lives in FY2021 in retail health (89.3% of total health GWP) and group health (10.7%).

The company offers a range of flexible and comprehensive coverage options primarily for retail health accounting for 87.9% of total GWP in FY2021, group health 10.5%, personal accident 1.6% and overseas travel 0.01%. The products target a variety of customer segments, including individuals, families, students, senior citizens, as well as persons with pre-existing medical conditions across the broader middle market customer segment.

The company is supported by promoters, including Rakesh Jhunjhunwala, Safecrop Investments India LLP, and WestBridge AIF I.

Star Health posted a loss of Rs 380.27 crore on a negative total income of Rs 494.68 crore in the six months ended September 2021.