Star Health IPO opens today — Check out close date, allotment and other important details

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Star Health IPO opens today — Check out close date, allotment and other important details
BCCL
  • Star Health and Allied Insurance IPO has opened today and will close on December 2.
  • The health insurer’s IPO is looking to raise ₹7,249 crore through the public issue of shares.
  • The IPO consists of a fresh issue of shares worth ₹2,000 crore and an offer for sale of 5.83 crore shares by existing promoters and shareholders.
  • The company is fetching a premium of ₹10 over the upper price band of ₹900 in the grey market.
Health insurance company Star Health and Allied Insurance, which is backed by marquee investors like Rakesh Jhunjhunwala and Westbridge Capital, has opened its initial public offering (IPO) today and will last till December 2.

The company is looking to raise ₹7,249 crore through the public issue of shares. The price band of the IPO is ₹870-900 per share.

The IPO consists of a fresh issue of shares worth ₹2,000 crore and an offer for sale of 5.83 crore shares by existing promoters and shareholders.

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Also, the company is fetching a premium of ₹10 over the upper price band of ₹900 in the grey market.

Here are some of the important details of the IPO:
Issue details
Price band₹870 to ₹900
IPO open dateNovember 30
IPO close dateDecember 2
Allotment dateDecember 7
Initiation of refundsDecember 8
Credit of shares to demat accountDecember 9
IPO listing dateDecember 10
Minimum lot16

While most analysts suggest subscribing to the IPO for the long term, some are cautious about the high valuations.

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Angel One broking firm likes the price as it says the valuations appear fair considering its positioning. “Star Health stands out among other standalone health insurers in terms of size, strong growth rates and better operational performance which is reflected in pre-Covid numbers for the company. The valuations commanded by Star Health are in-line with recent deals in the segment and appear fair considering its positioning. Hence, we recommend ‘subscribe’ from a long-term perspective only,” said the broking firm.

Rajnath Yadav from Choice broking firm thinks the IPO could have been cheaper. “At a higher price band of ₹900, Star Health is demanding a market cap-to-net premium earned multiple of 10.3 times, which is at premium to the peer average. Moreover, the demanded valuations are at elevated premium to recent capital issuance,” said the analyst

The private health insurer has a market share of 15.8% in the Indian health insurance market as of financial year 2021. As of September 30, 2021, it has a distribution network of 779 health insurance branches spread across 25 states and 5 union territories in India.

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Star Health IPO is asking for five times the price that Rakesh Jhunjhunwala paid in 2018
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