Star Health and Allied Insurance Company, backed by ace investor Rakesh Jhunjhunwala, will open its initial public offer (IPO) on November 30 and the issue will close for subscription on December 2. The IPO proposes to raise Rs 7,249 crore and the price band has been fixed at Rs870-900 apiece. Star Health’s public offer will be the third-largest in 2021. Earlier this year, Paytm and Zomato successfully raised Rs 18,300 crore and Rs 9,375 crore, respectively.
The offer comprises a fresh issue of shares worth Rs 2,000 crore and an offer-for-sale (OFS) of up to 5.83 crore shares by existing promoters and shareholders, aggregating up to Rs 5,249.18 crore. Proceeds from the issue will be utilised for solvency maintenance and augmentation of the company’s capital base. At the upper price band of the offer, the company eyes a valuation of Rs 51,000 crore after IPO.
The company has set aside shares worth Rs100 crore for its employees at a discount of Rs80. Besides, 75% of the issue is set aside for qualified institutional buyers (QIBs), 15% for non-institutional investors (NIIs), and 10% for retail investors. Safecrop Investments, Konark Trusts, and MMPL Trusts will trim their stakes via OFS in the offer. Apis Growth, University of Notre Dame, and MIO Star are other non-promoters diluting their stake in the offer. Currently, more than a 62% stake in the company is held by promoters. Ace investor Rakesh Jhunjhunwala and his wife Rekha Jhunjhunwala together hold 17.26% in the company. However, the Jhunjhunwalas will not dilute their stake via OFS, the management clarified in a press conference on Wednesday.
Incorporated in 2006, Star Health and Allied Insurance Company is currently the largest private health insurer in India, with a market share of 15.8% in the Indian health insurance market in FY21. However, the company posted a net loss of Rs 380.27 crore in the six months period ended September 2021, against a profit of Rs 199.28 crore during the same period in the preceding year.
“The number of claims during the pandemic and the second wave reflected on our numbers. We are seeing a gradual decrease in the claims now as compared to the pandemic levels, given the vaccination scenario in the country. Probably, we will be comfortable in the Q4,” S Prakash, MD, Star Health and Allied Insurance Company, said during the press conference on Wednesday.
The company will list on the exchanges on December 10. Anchor book, if any, will open on November 29, a day before the IPO.