Founded in the year 2005, Star health insurance is one of the largest standalone health insurance (“SAHI“) companies in India, is all set to float its IPO to raise a whopping amount of Rs 7249.18 croes. The health insurance company insured 20.5 million lives in Fiscal 2021 in retail health and group health, which accounted for 89.3% and 10.7%, respectively, of total health GWP in Fiscal 2021. The company distributes health insurance policies primarily through individual agents, which accounted for 78.9% of our GWP in Fiscal 2021. company’s total number of individual agents grew at a CAGR of 27.3% from 0.29 million in Fiscal 2019 to 0.46 million in Fiscal 2021. The firm has successfully built one of the largest health insurance hospital networks in India, with more than 10,870 hospitals. Out of the total number of hospitals in our network, we have entered into pre-agreed arrangements with over 7,000 hospitals, or 64.9%, of the total number of hospitals in-network as of March 31, 2021.
The firm will raise Rs 7249.18 crores through the fresh issue and offer for sale. Rs 2000 will be raised through the sale of fresh shares and remaining by selling existing shares by shareholders. Safecrop Investments India LLP will offload the maximum equity shares of over 3.06 crore through offer-for-sale. Konark Trust and Apis Growth will offload 1.37 lakh shares and 76.8 lakh shares, respectively. Further, up to 41.10 lakh shares will be sold by Mio IV star and 74.38 lakh Shares by the University of Notre Dame Du Lac. Mio Star and Roc Capital PTY will sell 41.10 lakh shares and 25.09 lakh shares respectively. UP TO 14.76 lakh shares will be sold by Venkatasamy Jagannathan and 18.04 lakh shares by Sai Satish and 1.44 lakh by Berhis Minoo Desia and 9,518 shares by MMPL trust.
The Star Health Insurance IPO will open its window for subscription on 30th Nov 2021 and the sale of the share will continue till 2nd December 2021. Allotment will be done on 7 Dec 2021. In case any investor who applied for the Star Health Insurance IPO is not allotted shares, for them, the refunds will be initiated on 8 Dec 2021 and finally, the shares of the Star health Insurance will be listed on both NSE and BSE on 10th December 2021. The IPO is also selling hot in the grey market with a double-digit premium of Rs 90.
The insurance company will not receive any proceeds from the offer for sale. However net proceeds from the fresh issue of the share will be utilized for undertaking the existing business activities and augmentation of capital base and maintenance of current solvency levels. Financially the firm is doing well, as its revenue from operation saw a rise in last year to Rs 52833.9 against revenue of Rs 48853.7million in FY20. Sales of the firm grew at a rate of 7.23% in Fy2021. However, the firm saw a nose dive fall in profit to report a loss of Rs Rs8255.8million against a profit of Rs2680.02million reported in FY20. But big-name like Rakesh Jhunjhunwala baking this IPO makes it certainly worth looking at. However, Investors must take do their study before investing in Star health Insurance IPO as, stock markets are subject to market risk, which can’t be avoided.