|IPO-Note||Star Health and Allied Insurance Company Ltd|
|Rs 870 – Rs 900 per Equity share||Recommendation: Subscribe|
Star Health and Allied Insurance Company Ltd Company Profile: –
According to CRISIL Research, Star Health and Allied Insurance Company is the largest private health insurer and largest retail health insurance company in India with the market share of 15.8% based on gross written premium of FY21. It had GWP (gross written premium) of Rs. 9348.95 Cr. in Fiscal 2021. It primarily focuses on the retail health and group health segments which accounted for 89.3% and 10.7% of the company’s total GWP in FY21 respectively. It also has largest health insurance hospital networks in India, with more than 11,778 hospitals as of September 30, 2021. Star Health distributes their health insurance policies primarily through individual agents, which accounted for 78.9% of their GWP in Fiscal 2021.
Star Health and Allied Insurance Company Ltd IPO – Details
|Objects of the issue|| ·Augmentation of capital base and maintenance of current solvency levels
· General Corporate Purposes
|Issue Size||Total issue Size -Rs. 7249.18 Cr.
Offer for Sale – Rs. 5249.18 Cr.
Fresh Issue – Rs. 2000 Cr
|Face value||Rs.10.00 Per Equity Share|
|Issue Price||Rs. 870 – Rs. 900|
|Bid Lot||16 shares|
|Listing at||BSE, NSE|
|Issue Opens:||30th Nov, 2021 – 2nd Dec, 2021|
|QIB||75% of Net Issue Offer|
|Retail||10% of Net Issue Offer|
|NIB||15% of Net Issue Offer|
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Star Health and Allied Insurance Company Ltd Financial Performance:
Star Health and Allied Insurance Company Ltd Shareholding Pattern:
|Shareholding Pattern||Pre- Issue||Post Issue|
|Promoters & Promoter Group||66.22%||58.42%|
Source: RHP, EWL Research
Star Health and Allied Insurance Company Ltd Strengths:
- largest private health insurance company in India with leadership in the retail health segment
- Have one of the largest and well spread distribution networks in the health insurance industry.
- Strong risk management focus with domain expertise driving a superior claims ratio and quality customer service.
- Experienced senior management team with strong sponsorship
Star Health and Allied Insurance Company Ltd Key Highlights:
- Gross Written Premium of the Company increased at 32% CAGR from FY18 to FY21 with market share increased from 10.9% to 15.8% in the same period.
- In Fiscal 2021 and H1FY22, retail health insurance products amounted to 87.9% and 85.6%, respectively, of total health GWP of the company.
- Has the lowest 29% expenses as a proportion of its gross premium amongst SAHI (standalone health insurance) players in Fiscal 2021.
- As a Result of the COVID-19 crisis, the company has seen an increase in net paid claims due to the COVID-19 accounted for 30% and 40.5% of their total net paid claims by value in Fiscal 2021 and H1FY22 respectively due to which it reported losses in FY21 and H1FY22.
Star Health and Allied Insurance Company Ltd Risk Factors:
- Have incurred losses in Fiscal 2021 and H1FY22 which may have a significant effect on liquidity if it is unable to raise funds to finance future losses.
- Global Pandemics, such as the recent coronavirus, COVID-19, could materially increase liabilities for claims by policyholders.
- As of September 30, 2021, its solvency ratio was 1.52x just above the insurance regulator’s prescribed control level of 1.50 times.
Star Health and Allied Insurance Company Ltd Outlook:
Star Health Insurance is the only SAHI (standalone health insurance) company among top five health insurance companies considering both health insurance premium of general insurance companies and gross written premium of SAHI companies. Health insurance premiums have grown at a CAGR of 19% in the last 6 years ending Fiscal 2021. CRISIL Research forecasts the gross direct premium for health insurers to grow at approximately 18% CAGR over the next four years. Star Health is the first pure-play health insurance company to be listed on stock exchange and could benefit from the increased awareness in the insurance market post Covid. There is no close peer to the company to compare valuation as there are only two listed general insurance companies ICICI Lombard and New India Assurance, which also provide other products like motor and fire insurance. Considering future prospects of the company we commend subscribe to the IPO.
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Need An Assistance:
Star Health and Allied Insurance Company Ltd IPO FAQ
Ans. Star Health Insurance IPO will comprise fresh share issue and new offer share issue. The company aims to go public to accelerate its growth and expansion plan.
Ans. The company will open for subscription on 30 November 2021.
Ans. The minimum lot size that investors can subscribe to is 16 shares.
Ans. The Star Health Insurance IPO listing date is 10 December 2021.
Ans. The minimum lot size for this upcoming IPO is 16 shares.
Ans. KFin Technologies will be the registrar for this upcoming IPO.
Ans. Trilegal and Cyril Amarchand Mangaldas are the legal advisors for this upcoming IPO.
Ans. The promoters of Star Health Insurance include Mio Star, Konark Trust, Apis Growth 6 Ltd, MMPL Trust and Safecrop Investments India.
Ans. The lead managers of Star Health Insurance include Credit Suisse Securities India, BofA Securities India, ICICI Securities, IIFL Securities, Axis Capital, CLSA India Pvt. Ltd, Citigroup Global markets India, Jefferies India Pvt. Ltd, SBI Capital Markets, DAM Capital Advisors, Ambit Pvt. Ltd, and Kotak Investment Banking.