Star Health’s IPO subscribed just 79%

Our Bureau | | | Updated on: Dec 02, 2021
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QIB, retail portion fully subscribed but NIIs, staff show lukewarm interest

Standalone health insurer Star Health and Allied Insurance Co’s Initial public offering (IPO) of ₹7,247 crore failed to garner full subscription from investors. It was subscribed just 0.79 times as the issue closed on Thursday, even after extended the timing till 7 p.m.

The QIB portion (75 per cent of the issue size) was just about fully subscribed, reflecting tepid response from anchor investors. Also, the retail portion (10 per cent) of the issue also saw moderate subscription.

The IPO received bids for over 3.56 crore (3,56,02,544) shares against the total issue size of over 4.49 crore (4,49,08,947) shares, according to the data (as of 7 pm on Thursday) on the last day.

The retail portion of the issue was was subscribed 1.10 times while the window of QIB received bids for 1.03 times. However, the portion reserved for non-institutional saw a bidding of just 0.19 times while even the employee quota saw just 10 per cent or 0.10 times.

For an IPO to be successful, the company needs to raise at least 90 per cent of the issued size (amount). However, according to market sources, the Star Health issue will sail through if investment bankers decide to prune the offer-for-sale component of the IPO. In the past, ICICI Securities issue got sailed through despite the IPO being subscribed by just 87 per cent, after its promoter ICICI Bank had reduced their OFS size.

Issue details

Star Health’s IPO comprises a fresh issue of equity shares worth ₹2,000 crore and an offer for sale (OFS) of up to 5.83 crore equity shares by promoters and existing shareholders of the company. It fixed a price band of ₹870-900 per share and on the eve of its IPO debut, Star Health raised over ₹3,217 crore from anchor investors.

The company had allocated a total of 3.57 crore shares to 62 anchor investors at ₹900 apiece to anchor investors such as Monetary Authority of Singapore, Government of Singapore, Abu Dhabi Investment Authority, Morgan Stanley Asia (Singapore) Pte, Goldman Sachs (Singapore) Pte, BNP Paribas Arbitrage and Societe Generale are among the anchor investors.

The Chennai-headquartered company's IPO opened for subscription on Tuesday, November 30, 2021, and concluded at 5 pm Thursday, December 2, 2021.

The issue was extended till 7 p.m on December 2, for retail and eligible employees. For non-institutional investors the deadline was extended till 6 p.m.

Published on December 03, 2021

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