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Rakesh Jhunjhunwala-backed Star Health IPO subscribed 79% on last day

Rakesh Jhunjhunwala-backed Star Health IPO subscribed 79% on last day

The IPO received bids for 3,56,02,000 shares against 4,49,08,947 shares on offer, according to an update on the BSE.

Star Health is aiming to raise nearly 7,250 crore Star Health is aiming to raise nearly 7,250 crore

The initial public offering of Star Health and Allied Insurance Company Ltd, which is backed by ace investor Rakesh Jhunjhunwala, failed to fully subscribe on the last day. The IPO was subscribed 79 per cent on Thursday.

The cut-off time for uploading of bids had been extended upto 6 pm for non-institutional investors, while retail and employee categories have been extended till 7 pm.

The IPO received bids for 3,56,02,000 shares against 4,49,08,947 shares on offer, according to an update on the BSE.

The category for Retail Individual Investors (RIIs) was fully subscribed at 1.1x, while Qualified Institutional Buyers (QIBs) was subscribed 1.03x  and non-institutional investors portion received 19 per cent subscription.

The IPO has a fresh issue of up to Rs 2,000 crore and an offer for sale of up to 58,324,225 equity shares. The price range is Rs 870-900 per share.

On Monday, the company raised a little over Rs 3,217 crore from anchor investors.

At the upper end of the price band, the initial share sale is expected to fetch Rs 7,249.18 crore and the proceeds from the fresh issue will be used to augment the company's capital base.

Star Health, a leading private health insurer, is owned by a consortium of investors such as Westbridge Capital and Rakesh Jhunjhunwala.

SBI Life Insurance Company, HDFC Life Insurance Company, ICICI Prudential Life Insurance Company and ICICI Lombard General Insurance Company are among the insurance companies listed on the stock exchanges.

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 Limited, DAM Capital Advisors, IIFL Securities and SBI Capital Markets are the managers to the offer.

Star Health and Allied Insurance Company is the largest private health insurer in India with a market share of 15.8% in the Indian health insurance market in FY2021 in terms of Gross Written Premium (GWP). The company was the first standalone health insurance company established in India in 2006.

With the comprehensive health insurance product suite, the company insured 20.5 million lives in FY2021 in retail health (89.3% of total health GWP) and group health (10.7%).

The company offers a range of flexible and comprehensive coverage options primarily for retail health accounting for 87.9% of total GWP in FY2021, group health 10.5%, personal accident 1.6% and overseas travel 0.01%. The products target a variety of customer segments, including individuals, families, students, senior citizens, as well as persons with pre-existing medical conditions across the broader middle market customer segment.

Star Health posted a loss of Rs 380.27 crore on a negative total income of Rs 494.68 crore in the six months ended September 2021.