Star Health IPO: GMP halves ahead of subscription opening next week


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 company is aiming for a valuation of about $7 billion in its public offering, as per a Reuters report.

The IPO comprises fresh issue of equity shares worth 2,000 crore and an offer-for-sale of up to 58,324,225 equity shares by promoters and existing shareholders. The public offer includes a reservation of shares worth 100 crore for employees. At the upper end of the price band, the initial share-sale is expected to fetch 7,249 crore.

As per market observers, Star Health shares premium (GMP) have come down to 50 in the grey market today from 130 yesterday. The company plans to list on leading stock exchanges BSE and NSE on December 10.

Star Health, leading private health insurer in the country, is owned by a consortium of investors like Westbridge Capital and Rakesh Jhunjhunwala. The proceeds will be used to improve the capital base and maintain solvency levels, according to its prospectus.

BofA Securities, Citi, Kotak Mahindra Capital and Axis Capital are among the book running lead managers to Star Health’s public offering. 

The offer comes as several firms, including prominent startups, go public to cash in on booming Indian stock market amid massive liquidity and increased retail investor participation. If fully subscribed, Star Health’s IPO would be the third largest this year after fintech firm Paytm and food-delivery firm Zomato.

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