Star Health IPO: initial public offering, or Star Health and Allied Insurance Company IPO Set to open Tuesday, November 30th. The first issue of Star Health IPO, backed by renowned investor Rakesh Jhunjhunwala, will be open for three days. After the bidding process, Star Health IPO Will be closed on 2nd December i.e. Thursday. A day earlier, Star Health revealed that it had raised over Rs 3,217 crore from anchor investors before the issue was opened for public. The Star Health IPO is the last of its kind among 10 more offers that came before the month of November.
Star Health IPO Key Details, Financial Information
Star Health IPO, open between November 30 and December 2, has a price band of Rs 870-900 for a stock, the company had announced earlier. Tar Health & Alliance Company, Backed by Rakesh Jhunjhunwala, Safecorp Investments India And Westbridge plans to raise Rs 7,247 crore through its first issue. The company has divided the IPO into two parts. Of this, Rs 5,249 crore will be raised through offer for sale, in which 58,324,225 equity shares will be sold by existing shareholders and promoters. The remaining Rs 2,000 crore will be fresh issue.
people who want to invest in Star Health IPO One can bid for a minimum of 16 equity shares and thereafter in multiples of 16 shares. Retail investors can invest a minimum of Rs 14,400 for a lot. The maximum investment for retail investors for 13 lots will be Rs 1,87,200. This is equivalent to 208 equity shares.
The company has reserved shares worth Rs 100 crore for its employees for the Star Health IPO. Apart from this, 75 percent of the shares have been reserved for qualified institutional buyers, while 15 percent of the shares have been allotted to non-institutional buyers. The remaining 10 percent is reserved for retail buyers.
Star Health IPO Major Risks
The major risks involved in a Star Health IPO include the company being subject to adverse government policies and regulations. The health insurance industry has been hit hard by a pandemic, and Star Health was no exception. Therefore, the risk from the COVID-19 pandemic remains constant, while there is no favorable interest rate volatility for the company. In the case of Star Health, there is an inability to manage the hospital network and distribution channels, and the company will find it difficult to improve and maintain profitability competitions.
Star Health IPO GMP Today
Taking cues from key risks, Star Health IPO on Tuesday was fetching a premium of Rs 15 against the upper end of the price band of Rs 900, according to IPO Watch. On Monday, it gained Rs 5 from Star Health’s IPO gray market premium. However, it was still low and indicated poor performance during the Star Health IPO listing in the stock markets later in December.
Star Health IPO Valuation, Should You Subscribe?
Choice Broking: Despite positively impacting business growth, the pandemic has severely impacted profitability. A wave of new viruses or the emergence of a new variant in the future will be a concern for profitability. However, the risk will be lower than the levels seen during H1 FY22. One of their various offerings is the equivalent to be considered for benchmarking valuations in the general insurance market and health insurance. Thus these can be considered as proxy peers. On the higher price band of Rs. 900, Star Health is demanding MCAP-to-net premium, which is a multiple of 10.3x, over the premium to peer average. In addition, demand valuation is at a higher premium to the recently issued capital issuance. Thus considering the above comments, we assign a “Subscribe with caution” rating to this issue.
ICICI Direct Research: Star is a leading player in the health insurance industry with a strong distribution network, diverse product suite. At the upper end of the price band, the company is valued at 5.9x AUM as of September 30, 2021. We assign UNRATED ratings to IPOs.
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