India’s Star Health fixes price band for initial share sale
By Vinu Lal
11:15, 24 November 2021
Indian health insurer Star Health & Allied Insurance Company has fixed a price band of INR870-INR900 a share for its initial stake sale to the public, according to a regulatory update.
Through the initial public offering (IPO), the south India-based company would raise up to INR72.49bn ($974.5m) at the upper end of the price band which will open on 30 November.
According to an Economic Times report, this would be the third-largest IPO in 2021 after Paytm and Zomato, which had raised INR183bn and INR93.75bn respectively.
Fresh issue and OFS
The IPO comprises a fresh issue of up to INR20bn and an offer for sale (OFS) of up to 58.32 million shares by existing investors in the company.
Among the existing investors offloading stakes include Safecrop Investments India (up to 30.68 million shares), Konark Trust (137,816 shares), MMPL Trust (9,518 shares), Apis Growth 6 (7.68 million shares) and University of Notre Dame Du Lac (7.44 million shares).
The offer also includes a reservation of shares worth up to INR1bn for employees, according to the Red Herring Prospectus (RHP or final papers) filed with domestic market regulator Securities and Exchange Board of India (SEBI).
India’s ‘Big Bull’ investor Rakesh Jhunjhunwala and his wife Rekha Jhunjhunwala together hold an 18.21% stake in the company, while Safecrop Investments India and WestBridge AIF together hold a 66.22% stake.
To build up capital base
The company intends to use the net proceeds from the IPO to augment its capital base and maintain solvency levels.
Star Health is the largest private health insurer and largest retail health insurance company in India, it said in the RHP, quoting a CRISIL Research. The company had a Gross Written Premium (GWP) of INR93.49bn, while it insured 20.5 million lives under its comprehensive health insurance product suite in fiscal 2021.
Kotak Mahindra Capital Company, Axis Capital, BofA Securities India, Citigroup Global Markets India, ICICI Securities, CLSA India, Credit Suisse Securities (India), Jefferies India, Ambit Private, DAM Capital Advisors, IIFL Securities and SBI Capital Markets are managers to the issue.