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Standalone health insurance player Star Health and Allied Insurance Company is planning to hit the capital market with a ₹7,249 crore initial public offer (IPO), which consists of an offer for sale by existing promoters/ shareholders and a fresh issue of shares.
The IPO will begin on November 30 and close on December 2. It is planning to sell shares in the price band of ₹ 870-900 per share.
The public issue will include a fresh issue of equity shares worth ₹2,000 crore and an offer for sale (OFS) by existing shareholders of the company worth ₹5,249 crore on the upper end of the price band, says the RHP filed by the company.
Ownership pattern
The Chennai-headquartered Star Health and Allied Insurance company is owned by a consortium of investors, including Safecrop Investments India LLP, WestBridge AIF I, and billionaire investor Rakesh Jhunjhunwala.
The promoter group, Safecrop Investments India, Konark Trust, MMPL Trust are looking to dilute their stake in the company. Other investors who would also be selling their stake include Apis Growth 6 Ltd, Mio IV Star, University of Notre Dame Du Lac, Mio Star, ROC Capital Pty Ltd, V Jagannathan, Sai Satish and Berjis Minoo Desai. Rakesh Jhunjhunwala, who with his wife holds over 17 per cent in the company, will not be diluting his stake in this IPO.
The company’s IPO will have a ₹100 crore reservation for employees. Meanwhile, 75 per cent of the issue is reserved for Qualified Institutional Buyers (QIB). 15 per cent of the issue is reserved for non-institutional investors (NII) and the remaining 10 per cent for retail investors. Investors can bid for a minimum of 16 equity shares and in multiples thereof. The proceeds of the issue will be used to augment the company’s capital base.
Performance
In FY21, the company, the largest private health insurer with 87 per cent of revenues from the retail segment, posted a net loss of ₹825 crore compared to a net profit of ₹268 crore in the year-ago period due to the impact of Covid-19. During the September 2021 quarter, the company’s net loss stood at ₹380 crore, against a net profit of ₹199 crore in the year-ago period.
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