Star Health & Allied Insurance IPO

Star Health & Allied Insurance IPO


(Long Term Only)

Issue Offer
Issue Opens on  Nov 30, 2021
Issue Close on  Dec 02, 2021
Total IPO size (cr)  7,249.18
Fresh issue  2000.00
Offer For Sale (cr)  5,249.18
Price Band (INR)  870-900
Market Lot  16
Face Value (INR)  10
Retail Allocation  10%
Listing On  NSE, BSE
Objects of the issue 

To augment the company’s capital base and  insolvency level.

Issue Break-up (%)
QIB Portion  75
NIB Portion  15
Retail Portion  10
Shareholding (No. of Shares)
Pre Issue  553,289,944
Post Issue  575,620,567
Indicative Timetable
Finalisation of Basis of  Allotment  07-12-2021

ASBA Fund 

Credit of equity shares to  DP A/c  09-12-2021
Trading commences  10-12-2021

SME-IPO of Star Health Insurance is on the boom as 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. From being the first standalone health insurance (“SAHI”)  company established in India in 2006, it has grown into the largest SAHI  company in the overall health insurance market in India, according to  CRISIL Research.

Company offer a range of flexible and comprehensive  coverage options primarily for retail health, group health, personal  accident and overseas travel, which accounted for 87.9%, 10.5%, 1.6%  and 0.01%, respectively, of their total Gross written premium (GWP) in  Fiscal 2021.

Individual agents are the primary distributors of the  company’s health insurance plans, accounting for 78.9% of their GWP  in Fiscal 2021. In addition, the company has successfully built one of  India’s largest health insurance hospital networks, with 11,778 hospitals  as of September 30, 2021.

Company consistently ranked first in the retail health insurance  market in India based on retail health GWP over the last three Fiscal Years, according to CRISIL Research.

The retail health market segment is expected to emerge as a key  growth driver for the overall health insurance industry in India after  the COVID-19 crisis in India.

As of September 30, 2021 its distribution network had grown to  779 health insurance branches spread across 25 states and 5 union  territories in India.

The company has also successfully built one of the largest health  insurance hospital networks in India, with 11,778 hospitals, of which  7,741 hospitals, or 65.7 percent of the total number of hospitals in  their network, entered into pre-agreed arrangements with in Fiscal  2021.

Outlook & Company Valuation:

The company has mixed set on financials over the  last three years where the company’s GWP has increased over the years  while the company suffered a loss in FY21. In FY19, the revenues of the  company were Rs 3713 cr while in FY21 it grew to 5283 cr.

The Profit  was at Rs 128 cr in FY19 while the company suffered a loss of Rs 825 cr  in FY21. The health insurance sector is likely to flourish as individuals  become more aware of the benefits of health insurance. If we look at  the company’s financials, we can see that it was doing well until Covid  hit last year. The company has the largest market share which is  positive for the company however the industry is getting competitive.

The valuation of the company is stretched. At the upper price band of  Rs. 900, Star Health is demanding an MCAP to net premium earned  multiple of 10.3x, which is at a premium to the peer average.

IPO Note



Venkatasamy Jagannathan is the Chairman and CEO of the Company. He holds master’s degree of arts in  economics and have more than 47 years of experience in the insurance industry

Subbarayan Prakash is the Managing Director of the Company. He has several years of experience as a surgeon  and has previously worked with Saudi Operation & Maintenance Company Limited.

Anand Shankar Roy is the Managing Director of our Company. He holds a bachelor’s degree in commerce and he has 21 years of experience in the insurance industry

Sumir Chadha is a Non-Executive Nominee Director of the Company he has several years of investing  experience in Indian companies, both public and private.

Deepak Ramineedi is a Non-Executive Nominee Director of the Company. He has several years of experience in  the private equity industry

Utpal Hemendra Sheth is a Non-Executive Nominee Director of the Company. He holds a bachelor’s degree in  commerce.

Rohit Bhasin is an Independent Director of the Company

Anisha Motwani is an Independent Director of the Company.

Berjis Minoo Desai is an Independent Director of the Company

Kaarthikeyan Devarayapuram Ramasamy is an Independent Director of the Company

Rajni Sekhri Sibal is an Independent Director of the Company

Rajeev Krishnamuralilal Agarwal is an Independent Director of the Company


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

Largest and well spread distribution network 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.

Substantial investment in technology and innovative business processes.

Demonstrated track record of operating and financial performance.

Experienced senior management team with strong sponsorship.


Star Health Incurred Claim Ratio has increased from average 63.5% (FY2018 to FY2020) to 94% in FY21 and  91% in Q1 FY22. This is the main reason company has negative revenues and losses in the last 1.5 years.

The recent Covid-19 outbreak has had a significant impact on the company’s business and operations.

They were able to keep their market share because of their strong brand name. However, if they fail to keep  such a brand name, their business will suffer.

Company can be subject to claims by customers and/or regulators for alleged mis-selling.

Insurance companies depend on the accuracy and completeness of information provided by customers and  counter parties for pricing and underwriting their insurance policies.

Any increase in competition could negatively impact the company’s profitability

IPO Note



Name of the Company  EPS (Basic)  NAV  P/E  Net Worth (cr) RoNW (%)
Star Health and Allied Insurance Co Ltd  (16.54)  63.58  –  3,484.64  (23.69)%
Peer Group
ICICI Lombard General Insurance Co Ltd.*  32.41  163.56  46.66  7,435.15  19.81%
New India Assurance Co Ltd  9.95  112.17  15.30  18,485.38  8.81%

*ICICI Lombard General Insurance Company Ltd. is not strictly comparable with the Company as they operate under general insurance with health  insurance not forming a significant component, whereas the Company is a standalone health insurance provider.


Particulars (Rs. In Cr) FY 2021 FY 2020 FY 2019
Equity Share Capital 548 491 456
Other Equity 3,676 1,153 587
Net Worth 4,224 1,644 1,043
Total Borrowings 250 250 250
Premiums earned (Net) 5,023 4,693 3,580
Operating Profit/(Loss) (1,071) 361 165
Profit Before Tax (1,046) 413 182
Net Profit for the year (825) 268 128

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