Star Health IPO opens on November 30: 10 key things to know before subscribing public issue

Retail investors can put down as little as Rs 14,400 for a single lot (16 shares) and as much as Rs 1,87,200 for 13 lots (208 equity shares).

Star Health & Allied Insurance Company, founded in 2006 and backed by Rakesh Jhunjhunwala, will undertake its first initial public offering next week. With a market share of 15.8% in Fiscal 2021, it is one of India’s largest private health insurers.

Before you subscribe to the public issue, there are a few things you should know:

1) IPO Dates

The offer will be available for subscription on November 30th, with the deadline for subscription set for December 2nd, 2021.

2) Price Band

Safecrop Investments India, Westbridge, and ace investor Rakesh Jhunjhunwala-promoted company’s price band has been set at Rs 870-900 per share.

3) Offer Details

This IPO, which includes a fresh issuance of shares worth Rs 2,000 crore and an offer for sale (OFS) of 5.83 crore equity shares by numerous owners, intends to raise Rs 7,249.18.

Safecrop Investments India LLP, the promoter, would sell 3.07 crore shares through the OFS. Konark Trust and MMPL Trust, the promoter groups, will dilute 1.38 lac and 9.5 thousand shares, respectively.

APIS Growth 6 will sell 76,80,371 equity shares, MIO IV Star and MIO Star will sell 41,10,652 equity shares each, and University of Notre Dame DU LAC will sell 74,38,564 equity shares through OFS, among other shareholders.

ROC Capital Pty Limited will also sell 25,09,099 equity shares, Venkatasamy Jagannathan will sell ten lakh equity shares, Sai Satish will sell five lakh equity shares, and Berjis Minoo Desai will sell one lakh equity shares.

The offer includes a 100-crore share reserve for the company’s employees. The anchor book, if there is one, may open for a day on November 29, one day before the IPO.

4) Objectives of Issue

Star Health will use the net proceeds from new issuance to increase its capital base and keep its solvency levels stable.

5) The Size of the Lot and the Investor’s Reserved Portion

Investors can place bids for as few as 16 equity shares and in multiples of 16 shares after that. Retail investors can invest as little as Rs 14,400 in a single lot and as much as Rs 1,87,200 in a total of 13 lots (208 equity shares).

6) Industry and Company Profile

According to CRISIL Research, Star Health is the largest private health insurer in the Indian health insurance market, with a market share of 15.8%. It had total gross written premium (GWP) of Rs 9,348.95 crore in FY21 and Rs 5,069.78 crore in the first half of FY22, respectively.

The company specialises in retail health, group health, personal accident, and international travel, and offers a variety of flexible and comprehensive coverage options. In FY21, retail health and group health accounted for 87.9% and 10.5 percent of the company’s total GWP, respectively.

After the COVID outbreak, retail health insurance will be a crucial growth driver for the Indian health insurance business. India has one of the lowest rates of health insurance penetration in the world, with barely 10% of the population having insurance policies outside of government schemes. In addition, rising health-care expenses will encourage consumers to purchase health insurance in the future.

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