Rakesh Jhunjhunwala-backed Star Health IPO to open on Nov 30, price band fixed at Rs 870-Rs 900

Star Health and Allied Insurance Company will open its initial public offering (IPO) on November 30. The insurer backed by ace investor Rakesh Jhunjhunwala has fixed a price band of Rs 870-900 per share.

Jhunjhunwala and his wife Rekha are the second-largest shareholders in the company with 18.21 percent stake. Safecrop Investments India LLP is the biggest shareholder with 47.77 percent stake in the company.

The IPO will close on December 2, 2021. The allotment of shares will be finalised by December 7, 2021. The firm will make its market debut on BSE and NSE from December 10.

The IPO involves fresh issue of shares worth Rs 2,000 crore and an offer for sale (OFS) of 5.83 crore equity shares by several shareholders including promoters Safecrop Investments India LLP, KONARK Trust & MMPL Trust.

APIS Growth 6, MIO IV Star, MIO Star, University of Notre Dame DU LAC, ROC Capital Pty Limited, Venkatasamy Jagannathan, Sai Satish and Berjis Minoo Desai will also sell a part of their stake via the OFS.

The company has allocated shares worth Rs 100 crore for its employees. The firm is looking to raise Rs 7,249.18 crore from the IPO at the upper price band.

The net proceeds from the issue will be utilised towards raising of company's capital base and maintenance of solvency levels.

The IPO's lot size is 16 shares for which one will have to spend Rs 14,400. A retail-individual investor can apply for up to 13 lots or 208 shares by spending Rs 187,200.

Star Health and Allied Insurance Company is among the largest private health insurers in India with market share of 15.8% in fiscal 2021.

The company focuses on the retail health and group health segments which accounted for 89.3% and 10.7% of the company's total gross Gross Written Premium GWP in fiscal 2021 respectively.

Currently, promoters including Jhunjhunwala, Safecrop Investments India LLP and WestBridge AIF I own 66.22 percent stake in the company. Their stake will be reduced to 58.42% after the IPO.

The book running lead managers to the issue are Kotak Mahindra Capital Company, Axis Capital, BofA Securities India, Citigroup Global Markets India, ICICI Securities, CLSA India, Credit Suisse Securities (India), Jefferies India, Ambit, DAM Capital Advisors, IIFL Securities, and SBI Capital Markets.