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Star Health And Allied Insurance IPO Review, Should You Subscribe Or Not?

Star Health And Allied Insurance IPO [Star Health IPO]: Star Health IPO is opened today[30, Nov 2021]. It will closed on 2 December. Indian Warren Buffett Mr. Rakesh Jhunjhunwala have a major stack of Star Health And Allied Insurance Company.

Star Health And Allied Insurance IPO Details

IPO Opening DateNov 30, 2021
IPO Closing DateDec 2, 2021
Issue TypeBook Built Issue IPO
Face Value₹10 per equity share
IPO Price₹870 to ₹900 per equity share
Market Lot16 Shares
Min Order Quantity16 Shares
Listing OnBSE, NSE
Offer for Sale58,324,225 Eq Shares of ₹10
(aggregating up to ₹5,249.18 Cr)
Employee Discount80

Star Health And Allied Insurance IPO Date And Listing Date

The Star Health IPO open date is Nov 30, 2021, and the close date is Dec 2, 2021. The issue may list on Dec 10, 2021.

IPO Open DateNov 30, 2021
IPO Close DateDec 2, 2021
Basis of Allotment DateDec 7, 2021
Initiation of RefundsDec 8, 2021
Credit of Shares to Demat AccountDec 9, 2021
IPO Listing DateDec 10, 2021

Star Health IPO Lot Size

The Star Health IPO market lot size is 16 shares. A retail-individual investor can apply for up to 13 lots (208 shares or ₹187,200).

ApplicationLotsSharesAmount (Cut-off)
Minimum116₹14,400
Maximum13208₹187,200

Star Health IPO Risks

The key risks in the Star Health IPO include the company being under unfavourable government policies and regulations.

The health insurance industry has suffered a lot from a Corona pandemic, and Star Health was no exception. Therefore, there is a continued risk from the Covid-19 pandemic, while there are no favourable movement in the interest rates for the company.

There is an inability to manage hospital networks and distribution channels in the case of Star Health, and the company will have difficulties in improving and maintaining the profitability competitions.

Star Health IPO GMP Today

Taking a cue from the key risks, the Star Health IPO was fetching a premium of Rs 15 on Tuesday against the upper end of the price band of Rs 900, as per IPO Watch.

This was up by Rs 5, from the Star Health IPO grey market premium on Monday. However, this was still low and indicated poor performance during the Star Health IPO listing at the stock markets later in December.

Star Health IPO Valuation, Should You Subscribe?

Choice Broking: Pandemic despite positively impacting business growth, has impacted the profitability severely. In the future occurrence of a new virus wave or the emergence of a new variant will be a concern for profitability.

However, the risk will be lower as compared to levels witnessed during H1 FY22. The peers considered for benchmarking the valuation operate in the general insurance market and health insurance is one of their various offerings. Thus these can be considered as proxy peers.

At a higher price band of Rs. 900, Star Health is demanding an MCAP-to-net premium earned multiple of 10.3x, which is a premium to the peer average.

Moreover, the demanded valuations is at elevated premium to recent capital issuance. Thus considering the above observations, we assign a “Subscribe with Caution” rating for the issue.

ICICI Direct Research: Star is a leading player in the health insurance industry with a strong distribution network, diversified product suite.

At the upper end of the price band, the company is valued at 5.9x AUM as of September 30, 2021. We assign a UNRATED rating to the IPO.

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