Retail investors can invest a minimum of Rs 14,400 for a single lot (16 shares), and their maximum investment would be Rs 1,87,200 for 13 lots (208 equity shares).
Rakesh Jhunjhunwala backed Star Health & Allied Insurance Company incorporated in 2006, will launch its maiden IPO in the coming week. It is one of the largest private health insurers in India with a market share of 15.8 percent in Fiscal 2021.
Here are some key things to know before subscribing to the public issue:
1) IPO Dates
The offer will open for subscription on November 30 and the last date for subscribing to the offer is set for December 02, 2021.
2) Price Band
The price band for the offer of Safecrop Investments India, Westbridge and ace investor Rakesh Jhunjhunwala-promoted company has been fixed at Rs 870-900 per share.
3) Offer Details
Star Health aims to mobilize Rs 7,249.18 through this IPO that comprises fresh issuance of shares worth Rs 2,000 crore and an offer for sale (OFS) of 5.83 crore equity shares by several shareholders.
Through the OFS, promotor Safecrop Investments India LLP will be offloading 3.07 crore shares. Promoter groups Konark Trust and MMPL Trust will be diluting 1.38 Lac Shares and 9.5K shares respectively.
Among other shareholders, APIS Growth 6 will sell 76,80,371 equity shares, MIO IV Star & MIO Star will offload 41,10,652 equity shares each, and University of Notre Dame DU LAC is going to sell 74,38,564 equity shares through OFS.
Further, ROC Capital Pty Limited will sell 25,09,099 equity shares, Venkatasamy Jagannathan 10 lakh equity shares, Sai Satish 5 lakh shares, and Berjis Minoo Desai will offload 1.44 lakh equity shares.
The offer includes a reservation of shares worth Rs 100 crore for the company’s employees. The anchor book, if any, may open for a day on November 29, a day before the opening of the IPO.
4) Objectives of Issue
Star Health is going to utilize net proceeds from fresh issues towards augmentation of its capital base and maintenance of solvency levels.
5) Lot Size and Investor’s Reserved Portion
Investors can bid for a minimum of 16 equity shares and in multiples of 16 shares thereafter. Retail investors can invest a minimum of Rs 14,400 for a single lot, and their maximum investment would be Rs 1,87,200 for 13 lots (208 equity shares).
6) Company Profile and Industry
Star Health with a market share of 15.8 percent is the largest private health insurer in the Indian health insurance market, as per a report from CRISIL Research. In FY21 and first half of FY22, it had total gross written premium (GWP) of Rs 9,348.95 crore and Rs 5,069.78 crore, respectively.
The company offers a range of flexible and comprehensive coverage options primarily for retail health, group health, personal accident and overseas travel. The retail health and group health accounted for 87.9 percent and 10.5 percent of its total GWP in FY21.
The retail health insurance will be a key growth driver for the health insurance industry in India especially after the COVID pandemic. The penetration of health insurance in India is still one of the lowest in the world and only 10 percent of the population has insurance policies outside of government plans. Also, higher health care costs will push people to go for health insurance going forward.
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