Star Health Insurance Files IPO Papers with SEBI for Rs. 2,000 crore Issue

By Angel One | Published on 23rd July 2021 | 68

Star Health Insurance Files IPO Papers with SEBI for Rs. 2,000 crore Issue

Star Health and Allied Insurance Company has filed a draft red herring prospectus (DRHP) with market regulator SEBI to raise funds via an initial public offering. According to sources, the IPO will comprise a fresh share issue worth approximately Rs. 2000 crores.

The listing will also consist of an OFS of around 6.01 crore equity shares by company shareholders and promoters. The final size of this OFS might change depending on company valuation.

Know More About Star Health insurance

India’s leading private health insurer, Star Health and Allied Insurance Co. Ltd., was founded in 2006. The Chennai-based company is also the country’s first standalone health insurance provider. It offers a wide range of coverage options catering to corporates, individuals, and families.

Here are a few insights into the company financials – 

  • Star Health Insurance recorded a total GWP of Rs. 9,348.9 crores.
  • Personal accident, group health, retail health, and overseas travel accounted for 1.6%, 10.5%, 87.9%, and 0.01% of this GWP.
  • The company recorded a 15.8% share in the country’s health insurance market in the same period. 
  • During this time, Star Health Insurance issued 70 lakh coverage policies.
  • The company’s total income for FY21 was Rs. 7405.32 crores.

With a network of 10,870 hospitals, the firm reported a surge in the number of claims amidst the Covid-19 crisis. As of March 2021, the overall claims due to Covid-19 were worth Rs. 1,638.98 crores.

Key Takeaways from the Upcoming Star Health Insurance IPO

Here is a list of all details available on this potential IPO as of now:

  • The company has allocated 10% of its IPO shares to retail investors.
  • 75% of shares are reserved for qualified institutional buyers (QIBs), and the remaining 15% are available for non-institutional bidders (NIIS).
  • The face value of each equity share in this IPO will be Rs. 10.

WestBridge Capital, Safecrop Investments India LLP, and billionaire Rakesh Jhunjhunwala are the leading investors of Star Health Insurance.

Here is a table of contributors to the OFS in this IPO with their respective percentage of shares:

Promoters and shareholders Equity shares in OFS
MMPL Trust 9,518
Konark Trust 1.38 lakh
Apis Growth 6 76.80 lakh
Safecrop Investments India LLP 3.06 crore

Credit Suisse Securities (India), CLSA India, Ambit, Jefferies India, IIFL Securities, SBI Capital Markets, and DAM Capital Advisors will be managing this IPO’s fresh issue. 

The Star Health Insurance IPO filing comes soon after the IPO listing of the notable Rakesh Jhunjhunwala-backed Nazara Technologies this year.

How will Star Health Insurance Benefit from this IPO proceeds?

Star Health Insurance is following the footsteps of previously listed companies ICICI Lombard General Insurance, HDFC Life Insurance Co. Ltd, and ICICI Prudential Life Insurance to become the 4th private health insurer to go public. 

This IPO listing will help the company enhance its solvency ratio. It plans to utilize proceeds to expand its capital base in FY22. 

Parting Words

The IPO will be a means of partial exit for primary investors while enhancing business capital at the same time. The increasing demand for health insurance in times of medical emergency has helped and continues to help the firm grow and explore a public listing.  

With the continuation of its current progress rate, potential investors will be able to benefit heavily from investment in this potential IPO.

 

Frequently Asked Questions

 

  • Who are the legal advisors of Star Health Insurance IPO? 

 

Trilegal and Cyril Amarchand Mangaldas are the legal advisors of Star Health Insurance for this IPO.

 

  • When will Star Health Insurance launch its upcoming IPO?

 

The company has not released any statement regarding this matter yet. 

 

  • Who has Star Health Insurance appointed as the registrar of this IPO?

 

The company has appointed KFin Technologies as the registrar of its upcoming IPO.

 

  • Who are the BRLMs appointed for the Star Health Insurance IPO?

 

Axis Capital, Kotak Mahindra Capital Company, ICICI Securities, BofA Securities India, and Citigroup Global Markets India will be acting as the BRLMs for this IPO.

 

  • Where will Star Health Insurance IPO listing take place?

 

Star Health Insurance IPO shares will be listed on BSE and NSE.