Star Health and Allied Insurance Company Limited IPO

Star Health and Allied Insurance Company Limited is planning to raise Rs 7249.18 crore through an Initial Public Offering.

The IPO subscription will open on November 30, 2021 and close on December 2, 2021. The price band is fixed at Rs 870 to Rs 900 per equity share.

The issue comprises of fresh issue of equity shares worth Rs 2000 crore and Offer For Sale of Rs 5249.18 crore. The face value of the equity share is Rs 10 apiece.

The eligible employees of the company will receive shares at a discounted price of Rs 80 per equity share, subject to terms and conditions.


Company Summary

Star Health and Allied Insurance Company is one of the leading private health insurers in India with a market share of 15.8% in financial year 2021, according to CRISIL Research. In Fiscal 2021 the total gross written premiums (GWP) were Rs 9348.95 crore and in April-September 2021, total GWP was 50,69.78 crore.

Star Health has successfully built one of the largest health insurance hospital networks in India, with 11,778 hospitals as of September 30, 2021. Out of which, they have pre-agreed arrangements with 7,741 hospitals, or 65.7%, of the total number of hospitals. In Fiscal 2021 and the six months ended September 30 of FY22, they have processed 3.3 lakh and 2.5 lakh claims, respectively.

The company’s comprehensive health insurance product suite have insured 2.05 crore lives in fiscal 2021 in retail health and group health, which accounted for 89.3% and 10.7%, respectively, of its total health GWP in Fiscal 2021.

The insurance company distributes their health insurance policies primarily through individual agents, which accounted for 78.9% of their GWP in FY21.

As of September 30, 2021 the company’s distribution network had grown to 779 health insurance branches spread across 25 states and 5 union territories in India. Their wide branch network is complemented by 562 Sales Managers Stations (“SMS”), which are small individual service centres, and over 6,892 in-house sales managers. Their other origination channels include distribution by direct online sales through telemarketing and website, brokers, insurance marketing firms and web aggregators.

The company’s insurance products cater to various customer segments including individuals, families, students, senior citizens, as well as persons with pre-existing medical conditions across the broader middle market customer segment.


Company Strength

  • One of the largest private health insurance company and standalone health insurance company.
  • Leadership position in the retail health segment.
  • Wide spread distribution networks with an integrated ecosystem.
  • Comprehensive insurance product suite.
  • Strong risk management with domain expertise driving superior claims ratio and quality customer service.
  • Proven track record of excellent operating and financial performance.


Company Promoters

Safecrop Investments India LLP, Westbridge AIF I and Rakesh Jhunjhunwala are the promoters of the company.


Company Financials

Particulars

For the period ended (Rs in crore)

31-Mar-21

31-Mar-20

31-Mar-19

Total Assets

4,466.57

1,896.77

1,642.64

Total Revenue

-907.78

461.96

226.25

Profit After Tax

-825.58

268.002

128.23

Below table show the financial details for first six months (April to September) in FY 22 and FY 21

Particulars

For the six month period ended (Rs in crore)

30-Sep-21

30-Sep-20

Total Assets

4,974.94

2,100.89

Total Revenue

-494.68

334.31

Profit After Tax

-380.27

199.29

Purpose of the IPO

  • The company plans to utilize the net proceeds from the fresh issue towards augmentation of their our capital base to meet its future capital requirements.
  • The company intends to maintain its current solvency levels.
  • The company also believes that the listing of equity shares will enhance their visibility and brand name among existing and potential customers.


IPO Details

IPO Opening Date

November 30, 2021

IPO Closing Date

December 2, 2021

Issue Type

Book Built Issue IPO

Face Value

Rs 10 per equity share

IPO Price

Rs 870 to Rs 900 per equity share

Market Lot

16 Shares

Min Order Quantity

16 Shares

Listing At

BSE, NSE

IPO Lot Size

Application

Lots

Shares

Amount (Cut-off)

Minimum

1

16

Rs 14,400

Maximum

13

208

Rs 1,87,200