The Rakesh Jhunjhunwala-backed Star Health and Allied Insurance Company, Country’s biggest private health insurance firm with a 15.8% market share, aims to go public. The Star Health IPO (initial public offering) will take place in 30 November 2021.
Table of Contents
About
As per CRISIL Research, they have evolved from being the first standalone health insurance (“SAHI”) business formed in India in 2006 to becoming the biggest SAHI company in the total health insurance market in India.
In Fiscal 2021, its entire health insurance product suite insured 20.5 million people in retail health and group health, accounting for 89.3 percent and 10.7 percent of their overall health GWP, correspondingly.
In Fiscal 2021, they had a retail health GWP of INR 82,150.90 million and a total GWP of INR 93,489.50 million, indicating that they are primarily centered on the retail health market sector.
Retail Heathcare
Over the previous 3 fiscal years, they have continuously placed #1 in India’s retail health insurance industry based on retail health GWP.
Owing to reduced penetration of health insurance, strong out-of-pocket healthcare costs, and the fact that only 10% of the population has insurance policies beyond the government plans, the retail health market section is anticipated to arise as an important growth driver for the total health insurance sector in India following the COVID-19 emergency.
Their retail health GWP was more than three times that of the next biggest retail health insurance market player in Fiscal 2021, putting us in a strong position to continue to expand their company.
Business Strategies
Individual agents are the primary distributors of their health insurance, accounting for 78.9% of our GWP in 2021. Although health insurance is mainly an assistance product, consumers typically want assistance in picking the appropriate coverage for their requirements and during the claims process.
Individual agents are the major form of distribution in the health insurance business. As per CRISIL Research, they had the most individual agents across SAHI insurers as of December 31, 2020, with three times the number of salespeople as the next top SAHI firm.
From 0.29 million in Fiscal 2019 to 0.46 million in Fiscal 2021, their overall number of individual representatives rose at a CAGR of 27.3 percent.
Star Health IPO
Star Health Insurance, headquartered in Chennai has submitted Draft Red Herring Prospectus(DRHP) to Securities and Exchange Board of India(SEBI) for initial public offering (IPO) of a fresh issue of Rs 2,000 crore, & an offer for sale(OFS) of up to 6,01,04,677 equity shares on 21 July, 2021.
There will be fresh issue of Rs 2,000 crore & OFS (Offer for sale) of 6,01,04,677 equity shares from existing Promoters mentioned in the DRHP of the company.
They got approval from Securities and Exchange Board of India(SEBI) to float the initial public offering (IPO) in the market on 21 October 2021.
Financials Trends
| Particulars | For the year/period ended ( in Cr.) | ||||
|---|---|---|---|---|---|
| 31-Mar-21 | 31-Mar-20 | 31-Mar-19 | |||
| Total Assets | 10,500.99 | 6,126.73 | 4,872.46 | ||
| Total Revenue | (907.78) | 461.96 | 226.25 | ||
| Profit After Tax | (825.58) | 268.00 | 128.23 | ||
Basic and Diluted Earnings Per Share (EPS)
| Financial Period | Basic EPS (in INR) | Diluted EPS (in INR) | Weight |
| Financial Year 2021 | (16.54) | (16.54) | 3 |
| Financial Year 2020 | 5.59 | 5.48 | 2 |
| Financial Year 2019 | 2.81 | 2.78 | 1 |
| Weighted Average | 0.98 | 0.91 |
Objects of the Issue
- Prepayment / repayment of all or a portion of the outstanding borrowings of the company to be availed on consolidated basis.
- To meet common corporate objectives.
Basis of The offer
The following are few of the generated value and key advantages that go into determining the Offer Price:
- The country’s largest private health insurance business, having a stronghold in the important retail health market.
- One of the health insurance industry’s biggest and most widely distributed distribution networks, as well as an integrated ecosystem.
- Product portfolio that is diverse, with an emphasis on new and specialised solutions;
- A strong risk management strategy combined with subject expertise leads to a higher claims ratio and better customer service.
- Significant investment in technology and business procedures that are innovative.
- Showed good operational and financial results.
Star Health IPO Peer Comparison
| S. No. | Company Name | PE |
| 1 | ICICI Lombard General Insurance Company Ltd | 47.78 |
| 2 | New India Assurance Company Limited | 15.93 |
Star Health IPO Details
| IPO Opening Date | 30 November 2021 |
| IPO Closing Date | 02 December 2021 |
| Issue Type | Book Built |
| Face Value | 10 per share |
| IPO Price | 870 to 900 per equity share |
| Market Lot | 16 |
| Min Amount | 14,400 |
| Listing At | BSE, NSE |
| Issue Size | 7,249 Core |
| Fresh Issue | 2000 cr. |
| Offer for Sale | 6,01,04,677 equity shares |
Star Health IPO Dates
Star Health IPO opening date is 30 November 2021, and the closing date 02 December 2021. The issue may list on 10 December 2021.
| IPO Open Date | 30 November 2021 |
| IPO Close Date | 02 December 2021 |
| Basis of Allotment Date | 07 December 2021 |
| Initiation of Refunds | 08 December 2021 |
| Credit of Shares to Demat Account | 09 December 2021 |
| IPO Listing Date | 10 December 2021 |
Basis of Allotment
| Type | % of Offer | Basis of Allotment |
|---|---|---|
| Qualified Institutional Buyer | 75 |
Roughly equivalent
|
| Non Institutional Investor | 15 |
Roughly equivalent
|
| Retail | 10 | Minimum 1 lot based on availability |
Star Health IPO Allotment Status
Allotment of equity stocks subject to the Fresh Issue and transfer of the Promoter Selling Shareholders’ OFS Stocks to the winning Bidders subject to the Offer for Sale. Nevertheless, the status of the allotment has yet to be revealed.
Here, you can find the Allotment Status of Star Health Insurance IPO.
Star Health IPO GMP (Star Health Insurance IPO GMP)
Star Health IPO Grey Market Premium is INR 0.
| Date | GMP (in Rs) | Subject to Sauda | Kostak (in Rs) |
| 09 December 2021 | |||
| 08 December 2021 | No Trade | No Trade | No Trade |
| 07 December 2021 | No Trade | No Trade | No Trade |
| 06 December 2021 | No Trade | No Trade | No Trade |
| 05 December 2021 | No Trade | No Trade | No Trade |
| 04 December 2021 | No Trade | No Trade | No Trade |
| 03 December 2021 | No Trade | No Trade | No Trade |
| 02 December 2021 | 6 | 800 | 100 |
| 01 December 2021 | 8 | 1300 | 100 |
| 30 November 2021 | 10 | 1800 | 200 |
| 29 November 2021 | 9 | 1400 | 150 |
| 28 November 2021 | 12 | 900 | 100 |
| 27 November 2021 | 24 | 1000 | 100 |
| 26 November 2021 | 34 | 1200 | 100 |
| 25 November 2021 | 53 | 1500 | 150 |
Star Health IPO Review
If you are looking for answer that Star health IPO is good or bad then here is the answer, you can avoid this IPO if you are looking for listing gain & whereas it might be good stock for long term view as it is largest private insurance company.
Star Health IPO Risk
- The global COVID-19 epidemic has had a severe impact on their company.
- Maintaining market share and developing their business is dependent on their image, company’s reputation, and market perception, and any bad publicity might have a substantial unfavorable impact on their business.
- Clients and/or regulators may file lawsuits against them for suspected mis-selling.
- The cancellation of the voluntary quota share treaty (“VQST”) reinsurance treaty, as well as the modification in UPR accounting technique, have had a significant effect on their business.
- Failure to react to technological development and the increasing usage of data in the Indian health insurance sector might have a negative impact on their business.
Other Threats
- Their business is susceptible to corruption and misconduct, and such actions might have a significant negative impact on their operations.
- Their Equity Shares are the subject of certain ongoing judicial procedures. Any negative outcome in these actions might have a significant negative impact on their business
- It might have a significant negative impact on their business if they are unable to establish and extend their network of agents in a cost-effective way.
- Inadequacies in their information technology platforms may have a significant negative impact on their business
- Regulatory and legislative measures taken against them or their partners might hurt their reputation and have a significant negative impact on their company.
Star Health IPO Brokerage views
- Yes Securities : Not Updated
- Choice Brokering: Not Updated
- Axis Securities: Not Updated
- IIFL Securities: Not Updated
- Trade swift: Not Updated
- Anand Rathi : Not Updated
- ICICI Securities: Not Updated
Star Health IPO Subscription Status
| Date | Day | QIB | NII | Retail | Employees | Total Subscription |
| 30 November 2021 | 1 | 0.00 | 0.01 | 0.64 | 0.03 | 0.12 |
| 01 December 2021 | 2 | 0.07 | 0.02 | 0.89 | 0.05 | 0.20 |
| 02 December 2021 | 3 | 1.03 | 0.19 | 1.10 | 0.10 | 0.79 |
Promoters
- Rakesh Jhunjhunwala
- Safecrop Investments India LLP
- WestBridge AIF I
Promoters Holding
| Pre Issue Share Holding | 59.32% |
| Post Issue Share Holding |
Star Health Insurance IPO Prospectus
Contact Details
Star Health and Allied Insurance Company Limited
No.1, New Tank Street,Valluvarkottam High Road, Nungambakkam,
Chennai Tamil Nadu 600 034 India
Telephone: +91 44 2828 8800
E-mail: [email protected]
Website: www.starhealth.in
Registrar
KFin Technologies Private Limited
Selenium, Tower B, Plot No- 31 and 32
Financial District, Nanakramguda,
Serilingampally, Hyderabad
Rangareedi 500 032
Telangana, India
Tel: +91 40 6716 2222/ 180034 54001
E-mail: [email protected]
Website: www.kfintech.com
Lead Manager(s)
- Kotak Mahindra Capital Company Limited
- Axis Capital Limited
- BofA Securities India Limited
- Citigroup Global Markets India Private Limited
- ICICI Securities Limited
- CLSA India Private Limited
- Credit Suisse Securities (India) Private Limited
- Jefferies India Private Limited
- Ambit Private Limited
- DAM Capital Advisors Limited
- IIFL Securities Limited
- SBI Capital Markets Limited
We hope we are able to answer all your questions about Star Health IPO. If you don’t have a Demat account, open it now with Zerodha best trading app.
Clarification
The reference of IPO Grey Market Premium (IPO GMP) is only valid for the date specified in the header.
On the IPO Grey Market, we do not purchase or sell IPO forms.
The Kostak Rate is the profit earned by selling an IPO application (in an off-market transaction) to somebody else before the issue is allotted or listed.
Do not subscribe to an IPO based solely on the premium price, as it may alter at any time before to the listing. Only consider the fundamentals of the companies when subscribing.
The GMP rates for IPOs are based on market intelligence. Please keep in mind that these IPO GMP rates may vary by geography and market.
Note:
We do not engage in grey market trading or facilitate the purchase or sale of IPO forms.
What is Grey Market?
The phrase “grey market” refers to an illegal over-the-counter market where IPO applications and IPO stock are traded before the entity is listed on a stock exchange. This is a technique for dealers to help consumers who wish to sell their home before it goes on the market.
This is also a way to increase the listing fee and provide help for the issue prior to the listing. In the IPO grey market, there are two types of transactions that take place:
- IPO stocks are traded at a premium in the grey market.
- At a kostak, an IPO application is traded.
What is grey Market Premium?
The Grey Market Premium, or GMP, is the price at which IPO stock shares are exchanged in the grey market.
This could be correct or incorrect, implying that the grey market trading price is greater or cheaper than the issue price, depending on demand and supply for the stocks.
Typically, individuals who do not want to incur the risk of their shares not being allocated through an IPO can purchase shares on the grey market in the hopes of flipping them on the IPO for a profit.
What is Kostak?
The additional amount in rupees at which IPO applications are sold in the IPO Grey Market is known as kostak (or price of application). The bonus of a maximum lot retail application in an IPO is generally described as the ‘Kostak’ value.
The Kostak price is significant primarily before the offer is closed for subscription and the ultimate bidding status is made accessible to IPO participants. After the final auction status is known to investors, only a small percentage of IPO applications are exchanged.
‘Kostak’ is made for those who do not want to incur a risk on an IPO or gain from a listing.
Example:
Star Health IPO
Issue Price: Rs 306 Per Equity Share (Maximum Bid price)
Lot Size: 45
Grey Market Premium: Rs 220 to Rs 230
Kostak (Rs 13770): Rs 680 to Rs 720
This means Star Health IPO applications of Rs 13770 are being traded in IPO Grey Market at Rs 680 to Rs 720.
Despite the fact that this IPO’s Grey Market Premium is roughly 75% of the issue price, the ‘Kostak’ is just 5% of the application value.
Kostak rate
The Kostak rate is the fee received by an investor who sells his or her IPO application on the grey market. Regardless of allotment status, this is the money an individual stands to gain.
Subject to Sauda
The money that an investor stands to gain by selling his or her application for firm allotment is referred to as the subject to Sauda. Firm allocation is the important operative phrase here. The sauda will be cancelled if the applicant is not allotted.
When selling an IPO application in the grey market, the client and seller agree that the sale will only be legal if the seller receives the allocation. The deal is avoided if the seller does not get any stocks throughout the IPO procedure.
FAQ
Star Health IPO Opening Date?
Star Health IPO will open in 30 November 2021.
Star Health IPO Listing Date?
Star Health IPO will list in 10 December 2021.
Star Health IPO GMP Today?
Star Health IPO Grey Market Premium is INR 0.
Star Health IPO Allotment Date?
Star Health IPO basis of allotment will be in 07 December 2021.
Lot size for Star Health IPO?
Lot size for Star Health IPO is 16.
