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Standalone health insurance player Star Health and Allied Insurance Company is planning to hit the capital market with ₹7,249 crore initial public offering (IPO), which consists of an offer for sale by existing promoters/shareholders and fresh issue of shares.
The IPO will begin on November 30 and close on December 2. The price band of the offer has been fixed at ₹870-900 a share. Bids can be made for a minimum of 16 equity shares.
“Listing will give us a wider visibility and there will be a better recognition for the company once it gets listed. A standalone health insurance player getting listed will be a landmark moment for the entire insurance industry,” Anand Roy, Managing Director of Star Health told BusinessLine.
The IPO will include a fresh issue of equity shares worth ₹2,000 crore and an OFS by existing shareholders of the company worth ₹5,249 crore on the upper end of the price band.
From the promoter group, Safecrop Investments India, Konark Trust, MMPL Trust are looking to dilute their stake. Other investors who would also be selling their stake include Apis Growth 6 Ltd, Mio IV Star, University of Notre Dame Du Lac, Mio Star, ROC Capital Pty Ltd, V Jagannathan, Sai Satish and Berjis Minoo Desai.
Rakesh Jhunjhunwala, who along with his wife holds over17 per cent in the company, will not be diluting his stake in this IPO.
To broadbase shareholders
“The listing should broad-base our shareholders. More retail shareholders can benefit out of our growth. Listing will also lead to better governance and disclosures. Regulators also want the companies to be listed after 10 years of operations as it will ensure continuity of the institutions. In the health insurance space, we have been a trendsetter,” Dr S Prakash, Managing Director of Star Health, said.
Not less than 75 per cent of the issue is reserved for Qualified Institutional Buyers and 15 per cent is reserved for non-institutional investors (NII) and the remaining 10 per cent for retail investors.
Shoring up capital base
The proceeds of the issue will be used to augment the company’s capital base.
The Chennai-headquartered Star Health and Allied Insurance company is owned by a consortium of investors including Safecrop Investments India LLP, WestBridge AIF I, and billionaire investor Rakesh Jhunjhunwala.
In FY21, the company, the largest private health insurer with 87 per cent of revenues from retail segment, posted a net loss of Rs 825 crore as compared to a net profit of ₹268 crore in the year-ago period, due to the impact of Covid-19. During the September 2021 quarter, the company’s net loss stood at ₹380 crore, against a net profit of ₹199 crore in the year-ago period.
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