Three insurance-related companies are gearing up to enter the primary market in the coming months, adding more fuel to the already charged-up IPO front.
Want to know what’s more interesting?
All three insurance firms come from different sub-segments of the sector.
Here’s a quick take on the topic.
A Sneak Peek into the Insurance IPO Candidates
All three insurance firms have already sent their draft papers to the Securities and Exchange Board of India. Let us explain the details about them in a nutshell:
1. PB Fintech
PB Fintech runs the renowned Policybazaar.com. It is an online portal for insurance customers. Here, individuals can screen insurance policies, shortlist them, and compare them to their peer group. They can even execute the transaction of buying insurance and renewing the policy every year.
Policybazaar.com plans to raise as much as Rs. 6,017 crores via this IPO. The IPO will consist of a fresh issue of Rs. 3,750 crores and OFS (Offer for Sale) of Rs. 2,267 crores.
2. Star Health Insurance
Star Health Insurance is the second major IPO candidate. The company is India’s largest stand-alone health insurer with around 15% market share. Backed by Rakesh Jhunjhunwala and Westbridge Capital, Star Health Insurance plans to raise a sum of Rs. 3000 crores.
The company will raise Rs. 2000 crores through a fresh issue and the other Rs. 1000 crores through an offer for sale.
India’s third-largest Third-Party Administrator (TPA), Medi-Assist, is the third insurance IPO candidate. TPAs are in charge of the entire administrative functions relating to claims and settlements.
Medi-Assist plans to raise a sum of Rs. 1000 crores via its IPO. The insurance giant has a pan-India network of as many as 11,000 hospitals. It is also a preferred service provider for famous names like Fortis, Apollo, Narayana Hrudayala, Manipal, etc.
IPO Flooding and SEBI Easing Rules
2007 was a year when India saw the highest number of IPOs in a single year. A total amount of Rs. 33,946 crores was raised through IPOs that year. However, the record is set to be broken this year, with more and more companies wanting to launch their IPO.
Meanwhile, India’s market regulator SEBI has significantly reduced the minimum lock-in period from 3 years to 18 months. However, the said lock-in period is subject to certain conditions. SEBI said that this step is taken keeping in mind the recent demand of various companies to enter the stock exchanges.
SEBI further said that in case the object of the issue is anything other than financial capital expenditure for a given project or is an offer for sale, then at least a 20% stake of the promoters will be locked in for 18 months.
So far in 2021, as many as 40 companies have raised more than Rs. 70,000 crores through IPOs. Of these firms, four were listed in August alone. Moreover, 24 more firms have filed their IPOs this month with a plan to raise over Rs. 4000 crores.
The RBI has also said that 2021 could become the IPO year as many domestic unicorn enterprises are entering the capital market with their IPOs. Investment bankers are henceforth expecting over 100 more IPOs to hit the markets till the year end, considering it as the best year for the same.
Frequently Asked Questions
- How much market shares does Policybazaar.com hold?
Policybazaar.com holds a total of 93% market share of sold online policies.
- How many shares is Star Health Insurance planning to sell?
Star Health Insurance is planning to sell a total of 6 crore shares under the offer for sale.
- What is the route through which Medi-Assist plans to raise the sum?
Medi-Assist is planning to raise the entire sum of Rs. 1000 crores through the OFS route.