An allied insurance company, Star Health, is planning to raise about 7,500-crore in an initial public offering (IPO) that is expected to open by the end of this month. The offer, which would be the third-largest after Paytm and Zomato, is likely to open by the end of November. The opening and closing dates of this upcoming IPO are yet to be announced.
Star Health’s IPO shall comprise a fresh issue of equity shares and a sale of about 6 odd crore equity shares by existing shareholders. Though the official announcement has not been made yet, Star Health’s IPO date could likely be November 30, 2021.
While the other details are awaited and the market conditions are being eyed upon by the officials ahead of announcing the launch, Star Health’s IPO share price could range around Rs. 900 per unit, which will take the value of the entity to Rs. 510 billion, making it the third largest offer of 2021.
The company has proposed to raise up to Rs 20 billion as a fresh issue and more than Rs. 50 under OFS. The proceeds from this shall be utilized by the company is expanding the size of its capital.
Safecrop Investments, MMPL Trust, and Konark Trust are the promoters who are looking to sell their stakes. In addition to these promoters, there are some other investors too who are looking forward to off-loading their holdings with this launch.
Quick Glance at Star Health’s Financials
The following table shows comparative figures from the financial statement of Star Health Insurance for the past two fiscal years.
|Particulars||FY 2020-2021||FY 2019-2020|
|Operating Profit||Rs. (1,071) Cr||Rs. 361 Cr|
|Net Profit||Rs. (826) Cr||Rs. 272 Cr|
|Gross Premium||Rs. 9,349 Cr||Rs. 6,891 Cr|
|Net Written Premium||Rs. 7,145 Cr||Rs. 5,261 Cr|
|Premium Income||Rs. 5,023 Cr||Rs. 4,693 Cr|
|Commission Income||Rs. 584 Cr||Rs. 341 Cr|
|Profit from Underwriting||Rs. (1,332) Cr||Rs. 163 Cr|
Prominent Holding in Star Health
The following table showcases some of the prominent holdings in this insurance business.
|Rakesh & Rekha Jhunjhunwala||17.27%|
Key Highlights about the Company
- Star Health Insurance is India’s largest private health insurance firm and the biggest retail health insurance company by the gross written premium (GWP). The company’s GWP for the year ended March 31, 2021, stood at Rs.8,215.09 crores.
- Ever since it was established in 2006, Star Health has been the leading player in the Indian health insurance market. It has a total GWP of over $9.3 billion and a pan-India network of over 737 branches in 26 States and 4 UTs.
- The company has become a popular name in the insurance business of the country and this could help the company raise funds with a successful offering.
- This insurance firm has several upsides in terms of revenue and growth. Its diverse product offerings, combined with the fast-paced growth of the health insurance industry, are expected to contribute to future profitability.
- Star Health has a strong financial base and steady revenue generation potential. Its robust financial position and steady growth potential make it an attractive investment for long-term investors.
Where will Star Health’s IPO share be listed?
The shares of Star Health Insurance after the successful launch of its IPO will list on both, National Stock Exchange as well as Bombay Stock Exchange.
What is the net written premium in the insurance business?
The net premium is the sum after the gross premium is computed for the insurance policies expenses. It does not take into account future expenses and is sometimes referred to as a benefits premium.