Star Health IPO : Subscribe or NOT?

The data has been compiled from various sources and might have small difference but overall theme is to subscribe or not — we will focus on that

Star Health IPO — Incorporated in 2006, Star Health and Allied Insurance Company Ltd is one of the largest private health insurers in India with a market share of 15.8% in Fiscal 2021. 

Business and Key areas of Operation – The company 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 Fiscal 2021 respectively. The company mainly distributes policies through individual agents and also includes corporate agent banks and other corporate agents. As of Sep 31, 2021, its network distribution includes 779 health insurance branches across 25 states and 5 union territories in India. Star Health has also built one of the largest health insurance hospital networks in India with more than 11,778 hospitals.

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Offer purpose —  The issue consists of a fresh equity issue of 2000 Cr and offer for sale of 5250 Cr. Offer is to augment its capital base

Risks

In Short term , Increasing Covid-19 is a major risk. In Long term, any such major disease can be a risk

Strength

Largest private health insurance company in India with leadership in the attractive retail health segment.

Largest network distribution in the health insurance industry.

Diversified product suite with a focus on innovation and specialized products.

Strong risk management with superior claims ratio and quality customer services.

Demonstrated track record of operating and financial performance.

Future

Company is working in an underpenetrated but highly competitive sector

Valuations

Valuations are pricey, better options in secondary market

Should we apply?

For medium to long term, prospects looks ok

Wait for listing to buy at discount to IPO price

In case you have any questions/ queries, please feel free to reach me through Contact Form

Do spread the word among your peers, family members or anyone who can benefit from this blog and asked them to subscribe. But be selfish and take care of yourself first by subscribing before they do.

Enjoy the day and your life. Don’t forget, we are alone in this grand universe and may not get a chance to live again.

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