Rakesh Jhunjhunwala-backed Star Health and Allied Insurance’s initial public offering (IPO) will open for subscription next week on Tuesday, November 30 and the three day share sale will conclude on December 2. The price band for its public offering has been fixed at ₹870-900 per share.
The health insurer’s IPO consists of a fresh issue of ₹2,000 crore and an offer for sale (OFS) of up to 58.32 million shares by its existing promoters and shareholders.
As per market observers, Star Health shares are available at a premium of ₹130 in the grey market today. The company plans to list on leading stock exchanges BSE and NSE on December 10.
Currently, Safecrop Investments India LLP has a 47.77% stake, while Rakesh Jhunjhunwala and his wife Rekha Jhunjhunwala hold 14.98% and 3.23% stake, respectively, in the company. The proceeds from the issue will be deployed in the fiscal year 2022 towards the augmentation of its capital base.
According to IRDAI norms and regulations, the insurer is required to maintain a minimum solvency ratio of 1.5. As of 31 March, its solvency ratio was 2.23x.
Star health is backed by investor consortium including private equity firms Madison Capital and Westbridge Capital and Indian ace investor Rakesh Jhunjhunwala. Founded in 2006, Chennai-based Star Health provides health, personal accident and overseas travel insurance.
The proposed IPO will make Star Health the fourth private sector insurance provider to list on Indian stock exchanges, following HDFC Life Insurance Co. Ltd, ICICI Prudential Life Insurance and ICICI Lombard General Insurance.
Kotak Investment Banking, Axis Capital, Bofa Securities India, Citigroup Global markets India, ICICI Securities, CLSA India Pvt. ltd, Credit Suisse Securities India, Jefferies India Pvt. Ltd, Ambit Pvt. Ltd, DAM Capital Advisors, IIFL Securities and SBI Capital Markets are the book lead running managers to the issue. KFin Technologies has been appointed as the registrar for the issue.
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