Trent ₹6 Dividend — Buy Before Jun 11, 2026 — Should You?

Key Takeaways
- Trent Limited declares a ₹6 dividend per share with the record date of 12-Jun-2026.
- To qualify for the dividend, you must buy before 11-Jun-2026 and ensure settlement.
- Top priority sectors: Consumer discretionary (retail) and dividend-focused equity strategies.
- Action: If you want the payout, consider buying before 11-Jun-2026; otherwise wait and assess fundamentals.
What Happened
Trent Limited announced a dividend of ₹6 per share for equity shareholders. The payout comes with a record date of 12-Jun-2026, and the last date to buy the stock to qualify is 11-Jun-2026. In practical terms, investors need to own the shares before 11-Jun to be eligible for the cash payout.
Key Details
Dividend payments are cash returns on top of any price appreciation. The settlement cycle in India suggests you should consider the T+2 timeline when placing orders to ensure settlement before or on the cut-off date. If you currently own the stock, this dividend increases your yield for the next 1-2 quarters, though price movements around payout can offset some gains.
Why This Matters
Dividend announcements indicate cash generation capability and can attract income-focused investors. For Trent, a ₹6 per-share payout may modestly improve total returns for holders, especially if the stock price doesn't swing wildly around the payout window. For you, the practical takeaway is to assess whether this dividend aligns with your income goals and risk profile, and whether you are comfortable with potential price volatility in the near term.
Market Context
In the current retail landscape, Trent's dividend yield should be weighed against its earnings growth, store expansions, and competitive dynamics with peers. If you already own Trent, the payout could slightly boost your realized return; if you're contemplating entry, you must factor in valuation and the stock's longer-term earnings trajectory. Your decision should hinge on fundamentals rather than chasing a cash yield alone.
What This Means For Your Portfolio
MOST IMPORTANT SECTION — direct investor impact: - Which stocks or sectors are affected: Trent's dividend affects your exposure to consumer discretionary and adds a cash component to returns for holders. - Should investor buy, hold, or wait: If you need income and the stock's fundamentals look solid, buying before 11-Jun-2026 can be reasonable; otherwise, consider your overall risk and diversify. - Any risk to existing portfolio: Dividend-driven moves can lead to concentration risk; price adjustments around the payout can create temporary drawdowns if not managed carefully.
Direct Implications
For you, the central question is whether to add or maintain a position in Trent to capture the ₹6 per share payout. If you already hold the stock, the dividend enhances your yield but do not rush to pay a higher entry price. If you are new to the stock, weigh the dividend along with business prospects such as store expansion, brand strength, and consumer demand trends.
Swastika Investmart notes that dividend announcements can lead to short-term price moves. If you are a retail investor, assess whether the yield justifies the risk and whether you already own the stock. The long-term case for Trent depends on its earnings, store expansion, and consumer demand, not just the dividend.
Sectors To Watch — Priority Order
1st Priority: Consumer Discretionary / Retail — aligned with Trent's core business and potential dividend-driven returns. 2nd Priority: Equity Markets / Dividend Income — compare yields and payout stability across the sector. Avoid Now: Fixed Income Funds — if you chase this dividend for income, you may miss better risk-adjusted opportunities in a balanced portfolio.
Action Points For Investors
- SIP investors: Rebalance gradually; don't overweight Trent solely for the dividend; keep your systematic plans intact. - Lumpsum investors: If you plan to deploy cash, align your entry with your risk tolerance and desired yield; don't chase the dividend alone. - Traders: Monitor price moves around the payout window; consider take-profit levels or hedging as needed.
Key Risks To Watch
2-3 risks investor should monitor: Dividend expectations may not sustain, price can drop around payout, and overall market volatility can impact both yield and valuation.
FAQ Details
What is the eligibility date for Trent's ₹6 dividend?
To receive ₹6 per share, you must own Trent shares before the last date to buy (11-Jun-2026) and have your trade settled.
How does this dividend affect my portfolio?
If you qualify, you will receive ₹6 per share as cash; the stock price may adjust near the payout, so total return depends on price movement as well as the dividend.
Should you buy Trent now for dividend income?
If your goal is dividend income and you are comfortable with the stock's fundamentals, buying before 11-Jun-2026 can be reasonable, but beware price risk and tax implications.
What other factors should investors consider with Trent?
Consider Trent's earnings growth, store expansion, consumer demand, competition, and overall market conditions; dividend alone should not drive allocation.
Conclusion
Trent's ₹6 dividend offers a potential income boost for shareholders, but entry decisions should hinge on your risk tolerance and the stock's fundamentals. If you aim to capture the payout, consider your timing carefully and balance with a view on long-term growth.
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Understanding Reverse Stock Splits
Introduction
Welcome! Today, we’re delving into the intriguing concept of reverse stock splits. Though it might sound complex, it's a straightforward concept once you break it down. A reverse stock split is a corporate action where a company reduces the number of its outstanding shares. This process effectively increases the share price proportionally. Let’s explore what this means and why companies might choose to perform a reverse stock split.
What is a Reverse Stock Split?
In a reverse stock split, a company consolidates its shares. For instance, in a 1-for-10 reverse stock split, every 10 existing shares are merged into 1 new share. This reduces the total number of shares outstanding but increases the share price accordingly.
Why Do Companies Perform Reverse Stock Splits?
- Increase Share Price: Companies often use reverse stock splits to boost their share price. This is especially useful for maintaining a minimum share price requirement for listing on stock exchanges. A higher share price can help avoid delisting from major stock exchanges.
- Improve Perception: A higher share price can positively affect how investors and analysts view the company. It may attract more investment and improve the company's overall market perception.
- Reduce Volatility: By consolidating shares, companies can reduce the volatility of their stock price. This makes the stock less susceptible to small price fluctuations, which can be beneficial for both the company and its investors.
How Does a Reverse Stock Split Work?
Here’s a simple example to illustrate:
- Before the Split: Imagine a company with 1,000,000 shares outstanding, each priced at ₹10. The total market capitalization is ₹10,000,000.
- After a 1-for-10 Reverse Split: The company will have 100,000 shares outstanding, each priced at ₹100. The total market capitalization remains ₹10,000,000.
Effects on Shareholders
- Shareholder Equity: Shareholders will own fewer shares after the split. However, the total value of their investment remains the same, assuming no other market changes. For example, if you owned 1,000 shares priced at ₹10 each before the split, you would own 100 shares priced at ₹100 each after the split.
- Stock Price: The price per share increases proportionally to the reverse split ratio. While the price per share rises, the overall value of the investment does not change immediately.
- Future Trading: A higher share price might make the stock more attractive to institutional investors and reduce the risk of being delisted from major exchanges. This could lead to increased trading activity and improved market perception.
Risks and Considerations
- Market Perception: Reverse stock splits can sometimes be viewed negatively. They might signal that a company is struggling or trying to artificially boost its stock price. This perception can affect investor confidence.
- Impact on Liquidity: Reducing the number of shares can impact trading liquidity. Fewer shares available in the market might make it harder for investors to buy or sell shares, potentially leading to wider bid-ask spreads.
Examples of Reverse Stock Splits
- Company A: Tata Motors: Tata Motors performed a 1-for-10 reverse stock split in 2018. Before the split, the share price was around ₹40, and after the split, it was adjusted to ₹400. The split was intended to increase the share price and improve liquidity.
- Company B: Zee Entertainment: Zee Entertainment executed a 1-for-5 reverse stock split in 2022. Before the split, the share price was approximately ₹30, and after the split, it increased to ₹150. This move aimed to meet the listing requirements and attract more institutional investors.
Conclusion
Reverse stock splits are strategic actions by companies to manage their share price and market perception. While they can offer benefits such as increased share price and improved investor perception, they also come with risks and considerations. It’s essential to stay informed and understand the broader context when evaluating the impact of reverse stock splits on your investments.

Sapphire Foods India Limited IPO
Sapphire Foods India limited one of YUM’s franchisee operators in the Indian subcontinent. They are also Sri Lanka’s largest international QSR chain, in terms of revenue. Company also established a presence in the Maldives. Company-owned and operated 209 KFC restaurants in India and the Maldives, 239 Pizza Hut restaurants in India, Sri Lanka and the Maldives, and two Taco Bell restaurants in Sri Lanka. They operate their restaurants in high traffic and high visibility locations in key metropolitan areas and cities across India and develop new restaurants in new cities as part of their brand and food category expansion. The company has an in-house supply chain function and works with vendor partners for food ingredients, packaging, warehousing, and logistics. The company operates warehouses across 5 Indian cities and has invested in building technology solutions in their restaurants. The company employs YUM brand's global online and digital channel solutions to enhance customer experience and achieve operational efficiency and financial control.
- Food services is a key segment in the Indian economy, with a market size of US$26.8 billion in the financial year 2021 growth of the food services sector in India is expected to grow more.
- Company’s franchisee Arrangement also provides a right to use YUM’s system and system property covering all aspects of business operations, as well as the flexibility to undertake, with YUM’s approval, local or regional promotions, while meeting YUM’s global quality assurance standards.
- The organized market, consisting of chain and organized standalone outlets, is expected to increase its share in the food services market in India from 37.8% in financial year 2020 to 51.3% in financial year 2025.
Outlook & Valuation:
The Company recorded a loss of Rs (99.89) cr. in the financial year FY21 against a loss of Rs (159.25) cr. in the previous year FY20. Revenue from operations in the same period declined to Rs 1,019.62 cr. in FY21 from Rs 1,340.41 cr. in FY20 due to the Covid-19 crisis. The issue is priced at a P/BV of 14.63 based on its NAV of Rs. 80.67 as of June 30. Sapphire Foods is a Leading quick-service restaurant brand with a large market presence and size. Their initial public offer will be a pure offer for the sale of its equity shares; also the company is loss-making in the last three financial years. The company aims to break even in the near future. We are in a bull run of IPO's where new edge businesses are on the front seat. IPO euphoria might lead to listing gain as the IPO is arriving at a P/S of 7x which is half to its peers however we expect the peers to outperform Sapphire Food over the long run. Thus we assign a "SUBSCRIBE" rating with a cautious view.

KEY MANAGERIAL PERSONNEL
- Sanjay Purohit is the Whole Time Director and Group CEO of the Company. He has over 30 years of work experience across consumer product categories including food and apparel retail, packaged food, and paints.
- Sunil Rewachand Chandiramani is the Chairman and Independent Director of the Company. He has experience of over 29 years and has worked in the field of accounting and advisory services.
- Sumeet Subhash Narang is a Non-Executive Director of the Company as a nominee of Sapphire Foods Mauritius Limited.
- Manish Mehta is a Non-Executive Director of the Company as a nominee of Sapphire Foods Mauritius Limited. He has experience of over 17 years.
- Vikram Ranjan Agarwal is a Non-Executive Director of the Company as a nominee of QSR Management Trust for the past 13 years and has worked in the field of private equity.
- Kabir Kishin Thakur is a Non-Executive Director of the Company. He has experience of over 14 years
- Deepa Gopalan Wadhwa is an Independent Director of the Company.
- Anu Ram Aggarwal is an Independent Director of the Company.
COMPETITIVE STRENGTHS
- Leading QSR brands with a substantial market presence and scale
- Strong relationship with YUM
- Continuous focus on delivering great customer experience
- Operational excellence
- Scalable new restaurant economic model for expansion
- Great place to work led by experienced management team and backed by institutional capital
KEY CONCERNS
- Company reported loss for the last three financial years and may incur additional losses in the future.
- The Coronavirus disease (COVID19) pandemic has substantially affected and may continue to affect the business
- Company will not receive any proceeds from the Offer for Sale. The Selling Shareholders will receive the net proceeds from the Offer for Sale.
- Company incurred indebtedness and may incur additional indebtedness in the future which could affect their ability to obtain future financing or pursue any growth strategy.
- There are material outstanding legal proceedings involving the Company, Subsidiaries, and Directors...


Paytm (One97 Communications Ltd) IPO: Outlook & Valuation
Incorporated in 2000, One97 Communications Limited (Paytm) is India’s leading digital ecosystem for consumers and merchants. Paytm offers ‘Payment Services’, ‘Commerce and Cloud Services’, and ‘Financial Services’ to 33.3 crore consumers and over 2.18 crore merchants registered with them, as of June 30, 2021.
Their 2-sided (consumer and merchant) ecosystem enables commerce, and provides access to financial services, by leveraging technology to improve the lives of their consumers and help their merchants grow their businesses.
In 2009, the company launched the first digital mobile payment platform, "Paytm App" to offer cashless payment services to customers and now, it became India's largest payment platform and the most valuable payments brand with a total brand value of US$6.3 billion as per Kantar Brands India 2020 Report.
The app enables customers to do cashless transactions at stores, top-up mobile phones, online money transfers, pay bills, access digital banking services, purchase tickets, play games online, buy insurance, make investments, and more. However, merchants can use the platform for advertising, online payment solutions, offering products to customers, and loyalty solutions. They have created a payments-led super-app, through which they offer their consumers innovative and intuitive digital products and services. They offer their consumers a wide selection of payment options on the Paytm app, which includes:
- Paytm Payment Instruments, which allow them to use digital wallets, sub-wallets, bank accounts, buy-now-pay-later, and wealth management accounts.
- Major third-party instruments, such as Debit and Credit Cards and Net Banking.
Offer services such as Paytm Wallet, Paytm QR, Paytm Soundbox, Gold investments, and Fixed Deposit, Paytm Postpaid, Merchant Cash Advance and FASTag.
Outlook & Valuation
The revenues of the company have been on the declining side, in FY19 revenue was at ₹3,579 cr while in FY21 it was at ₹3,186 cr. Also, it is a loss-making company with a loss of ₹(4,230.9) cr in FY19 which however reduced to ₹(1,701) cr in FY21.
We are in an era of new-age businesses where we have seen many unicorns getting listed recently. It is really arduous to provide a valuation for such types of companies. We expect only leaders will survive over a period of time and only a few such companies will be wealth creators while many can be wealth destroyers. As India is on the verge of digitalization, we may expect the company to get benefited from the same also new acquisition and strengthening of the PAYTM ecosystem from the IPO will be beneficial for the company. Thus we assign a "SUBSCRIBE" rating only for aggressive investors.

KEY MANAGERIAL PERSONNEL
- Vijay Shekhar Sharma is the Founder, Managing Director, and Chief Executive Officer of the company, and the Chairman of the Board. He oversees the Company's key strategic efforts including engineering, design, and marketing.
- Madhur Deora is the President and Group Chief Financial Officer of the company. He has been associated with the company since October 3, 2016.
- Manmeet Singh Dhody is the Chief Technology Officer, Payments. He has been associated with the company since April 1, 2020.
- Vikas Garg is the Chief Financial Officer of the company. He has been associated with the company since May 21, 2014, and was previously associated with the company from August 25, 2008, to September 28, 2012.
- Sudhanshu Gupta is the Chief Operating Officer of Paytm First Games Pvt Ltd, their Subsidiary. He has been associated with Paytm First Games Pvt Ltd since June 1, 2018.
- Bhavesh Gupta is the Chief Executive Officer of the Lending Business of the company. He has been associated with the company since August 4, 2020.
- Renu Satti is the Chief Operating Officer of Offline Payments of the company. She has been associated with the company since October 11, 2006.
- Praveen Kumar Sharma is the Managing Director and Chief Executive Officer of Paytm Payments Services Ltd. He has been associated with the company since September 2, 2019.
- Harinderpal Singh Takhar is the Chief Executive Officer of Paytm Labs Inc, their Subsidiary. He has been associated with Paytm Labs Inc. since June 2013.
COMPETITIVE STRENGTHS
- India's leading digital payment service platform.
- Strong brand identity with a brand value of US$6.3 billion.
- Large customer base with 333 million total customers, 114 million annual transacting users, and 21 million registered merchants.
- Paytm Super-app to access a wide range of digital payment services over mobile phones.
- Strong macro tailwinds.
- Increasing pace of digitization.
- Digital payments in India evolving rapidly
- Under-penetration and rising digitization of financial services
KEY CONCERNS
- They have a history of net losses and we may not be able to achieve profitability.
- The ongoing COVID-19 pandemic and measures intended to prevent its spread have had, and may continue to have, a material and adverse effect on the business and results of operations.
- The company may suffer if they are unable to retain existing customers, acquire new customers, grow the amount of consumer transactions, or increase in the client acquisition expenses.
- Their payment services account for the majority of their income. Their attempts to broaden their service offerings and market reach may not be successful, which might have a negative impact on their income.
- The business might suffer if they do not maintain or develop their technological infrastructure.
COMPARISON WITH LISTED INDUSTRY PEERS
There are no listed companies in India that engage in a business similar to that of the Company. Accordingly, it is not possible to provide an industry comparison in relation to the company


Why Did Paytm Stock Fall Sharply On The First Day Itself?
India’s leading digital payments system company Paytm made history after successfully launching India’s biggest ever IPO in the current month. As per the sources, the total worth of this public offering was Rs 18,300 Crores with the fixed price band at Rs 2080 to Rs 2,150 for each share.
The company hit headlines when the shares of the company made their market debut after much anticipation on Thursday at a 9 per cent discount. Against the expectations, Paytm Stock listed at Rs 1,955 dropped 9% from its issue price on the BSE. After some hours, the stock prices declined further and reached Rs 1,564 a share (a drop of 27.25%) & hit the lower circuit limit at the end of the day trade.
It has been seen that Paytm's market capitalization dropped to about $13.6 billion from its IPO valuation of $20 billion.
Here comes a question: How did India’s greatest IPO fail to give an outstanding performance? Let’s figure it out.
High Valuation Led to Losses for the Investors
Experts said that the company’s high valuation, loss-making business decisions and muted investor’s response are some of the primary reasons for the downfall, even though the company expects to break even by next year or in early 2023.
HNIs or and other powerful investors usually borrow funds for the IPO offerings at highly competitive rates. Hence, the investors will make a profit only if the IPO lists at a higher premium than the cost of funding.
After June 2021, merely 25% of the IPO were listed at a discount which led to a huge loss for the investors.
In the case of Paytm, the debut price was lower than anticipated as the stock opened at Rs 1,955 against the issue price of Rs 2,1050 at the upper end at BSE. The stock price is falling at 9.1 per cent. According to Money control, only aggressive investors were requested to put their money for future investments.
The weak response is being viewed as a sign that investors had become disillusioned with a recent string of IPOs with high valuations.
There are numerous reports out there that have claimed that Paytm’s business model lacks focus and attention.
Macquarie Stock Market Research firm has further said that achieving scale with profitability is the biggest challenge for the company. Also, the target price of Rs 1200 for the stock against its issue price of Rs 2,150 clearly shows the 40 per cent downside risks.
Competition May Drive Down Unit Economics
Also, the research firm points out that competitors of Paytm such as Amazon, Flipkart, Google etc are offering the same services. The competition became tough when new services such as Buy Today Pay Later were launched by the competitors.
This can be clearly seen from the fact that despite Paytm’s offering being much larger than other offerings, the demand was weaker than the recent stock sale. This is because Paytm has lost much of its market share to its competitors like Google and Flipkart.
Stiff Competition with Disruption in Business
Paytm holds its major competition with significant giants in the eCommerce industry like Amazon, GooglePay and Flipkart's Phone Pe. It faces intense competition from these adversaries in specific business areas like purchase currently pay later or buy today and pay later (BTPL)
Although Paytm's Rs. 18,300 crores IPO was listed at the top of the indicator range, it neglected to earn a lot of interest rather than other ongoing IPO events.
The biggest reason behind the market loss to Google Pay and Phone Pe was mainly responsible for this. It is also believed that the company’s FCF (Free cash flow) will not regain its pace till FY 2030.
In addition, the huge development in UPI-based payment structure hampered Paytm's business model.
UPI was presented by GOI in 2019 to build and promote a unified platform for payment in the whole country.
At this point, UPI represents almost 65% of Paytm's GMV, with a strong possibility to reach 85% by FY26
In any case, Paytm actually procures around 70% of its income from the payment business. It is a key part of the mobile wallet section. Nonetheless, this section has lost pertinence because of the advent of UPI payments.
Trouble to Achieve Scale with Profitability
According to a report by Macquarie Research, Paytm needs concentration, innovation and development in its business model. The firm accepts Paytm doesn't have the ability to accomplish scale with productivity.
The digital payment platform is associated with various business verticals, including consumer lending, payment gateway, monetary services etc. It has been consuming a lot of its money while attempting to maintain a few business fragments along with no emphasis on accomplishing benefits. In addition, Paytm procures lower revenue for every dollar it spends through advertising.
As such, the organization has been forced to move into other business segments as it is continuously looking for profitability. In any case, Paytm enjoys a huge client base with 50 million active customers and 22 million merchant banking clients.
Major Decline in Ecommerce Revenue
Paytm Mall, Paytm's internet business arm, contributes around 55% of its income in this income. During FY2019-21, the segment saw a sharp fall in income. This was predominantly because of rising competition from other significant adversaries.
Paytm neglected to stay aware of the internet business giants like Amazon and Walmart-possessed Flipkart. These players accompany a huge client merchant ecosystem and huge buyer offers.
Conclusion
Paytm stock crash tells us a lot. Only a good company is not the one that can offer you amazing benefits. There are certain things you need to ponder before subscribing to an IPO.
Therefore investors, keen to subscribe to SME IPOs must check the company’s financial and fundamentals. Carefully read the financial statements of a company, analyze its strength and weakness and valuations of a company before subscribing to the IPOs.

The IPO Rush: Why 2021 Proves To Be The Best Year of IPOs
Investment bankers and many investors tracking SME IPOs say that 2021 will be a record-breaking year for fundraising.
India is ready to make a record of the biggest IPO launching in the year 2021. In this blog, we will uncover all the reasons that why so many companies are going public this year:
Numerous companies including Policybazaar, Zomato, Paytm have gone public this year. Following the path of these giants, many more firms are expected to launch their IPO later this year.
This year, the companies are planning to raise the highest amount through IPO launching. Despite the impact of COVID 19, the companies are in a rush to go public.
Let’s try to figure out what is the top reason behind the IPO launching:
What is an IPO?
Initial public offering or IPO is a process under which a privately owned company offers its shares to people so that it can generate funds from investors. The process denotes the progress of a privately owned company to a public firm.
If an organization wants to become public, it has to follow two basic processes. Enter in the primary market to launch its IPO. Second, get listed on the stock exchange to become a publicly-traded company.
A few IPOs also include an Offer For Sale (OFS), which permits existing investors or promoters to minimize their shareholding in the listed companies.
Nevertheless, the amount raised through the OFS generally goes to private investors making their value available for sale.
Initial public offerings are a huge achievement for any company. They are raised when the company concludes it requires capital for a specific reason, like development, growth debt clearance, and funding corporate costs.
Any organization or startup doesn't grow immediately since its inception; they in the long run develop over a period to become more profitable and organized.
Different rounds of funding at the beginning stage and the further mixture of capital through private and private supporters lead to a company’s development.
There comes a turning point in any organization where its growth is soaked, and however the development rate may be positive, there is a flattened growth by a reduction in the rate.
At such a period, many companies are planning to go public via IPO to raise capital from the public.
There are times when a company is making a good profit, however, it needs more capital for development, growth and expansion as all the profits generated by it goes into debt clearance.
In such cases, going public not only helps the company to clear its debt but also utilizes its raised capital for the company’s further growth.
How do IPO’s Work?
Before going public, the privately held company seeks approval from the market regulator i.e. SEBI. Once it’s done, it starts revealing key insights regarding the IPO.
The key details include the price band for the IPO, lot size, launching date and distribution of share sales for various types of financial investors — non-institutional financial investors, institutional financial investors, existing employees and angel investors.
When the IPO process has begun, the company’s shares first start trading in the grey market — the informal market for unlisted shares. The process continues to take place till they are listed on the bourses.
It may be noticed that the grey market stocks are exchanged over-the-counter (OTC) and are not presented by the stock exchange; only traders are permitted to deal with them.
Investors normally get a small period i.e. typically 2-3 days to subscribe to a company’s public offering post IPO launching date.
During this period, investors (mostly retail investors) can bid for the offers through different stock trading platforms.
As the time period of IPO gets over, investors are required to check their IPO allotment status at their designation status on accessible channels - either the registrar or at the BSE site.
After the completion of allotment, the shares of the company get listed on the stock exchanges on a predetermined date.
Why IPO Rush: Reasons Why So Many Companies Going Public This year?
It has been seen that Several organizations have gone public regarding fundraising a year ago. Data suggest that organizations raised funds as much as $4.6 billion from IPOs last year. Analysts and investment bankers feel that this sum will be effectively outperformed in 2021 as more organizations are going for public offerings.
A head of investment banking at UBS India told Bloomberg that companies will generate twice the revenue as expected in the last year.
Many organizations have decided on IPOs at the end of 2020, because of the effect of the Covid-19 pandemic on business and the several securities exchange movements.
Experts further suggested that organizations are going public because of the highest performance found in the stock market and higher support of HNIs or high net worth individuals.
A State Bank of India (SBI) report recommended that over 14.2 million new individual investors have taken an interest in the stock market in 2020-21.
Indeed, even as the pandemic hits hard on India's economy, the domestic stock market has not been affected at all.
In fact, stock market indices such as Nifty 50 and BSE 30 have performed better than before.
If we talk about the market performance, a higher percentage of IPOs have done outstandingly well and more investors are hoping to capitalize on this period.
Organizations that are going public either bring capital because of the losses experienced during the Covid-19 pandemic or finance business expansion because of high demand.
Many techs and online delivery companies like Paytm, Nykaa, Zomato have gone public and the key reason is to raise capital and extend the business as the demand grows rapidly.
In the next few years, analysts expect over 50 digital tech companies will get listed on the bourses.

Star Health & Allied Insurance IPO
RatingSUBSCRIBE (Long Term Only)Issue OfferIssue Opens on Nov 30, 2021Issue Close on Dec 02, 2021Total IPO size (cr) 7,249.18Fresh issue 2000.00Offer For Sale (cr) 5,249.18Price Band (INR) 870-900Market Lot 16Face Value (INR) 10Retail Allocation 10%Listing On NSE, BSEObjects of the issue ⮚ To augment the company’s capital base and insolvency level.Issue Break-up (%)QIB Portion 75NIB Portion 15Retail Portion 10Shareholding (No. of Shares)Pre Issue 553,289,944Post Issue 575,620,567Indicative TimetableFinalisation of Basis of Allotment 07-12-2021Refunds/Unblocking ASBA Fund 08-12-2021Credit of equity shares to DP A/c 09-12-2021Trading 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
STAR HEALTH AND ALLIED INSURANCE COMPANY LTD IPO
KEY MANAGERIAL PERSONNEL
⮚ 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
COMPETITIVE STRENGTHS
⮚ 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.
KEY CONCERNS
⮚ 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
STAR HEALTH AND ALLIED INSURANCE COMPANY LTD IPO
COMPARISON WITH LISTED INDUSTRY PEERS (As on 31st March 2021)
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 GroupICICI 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.
FINANCIALS (RESTATED CONSOLIDATED)
Particulars (Rs. In Cr) FY 2021 FY 2020 FY 2019Equity Share Capital 548 491 456Other Equity 3,676 1,153 587Net Worth 4,224 1,644 1,043Total Borrowings 250 250 250Premiums earned (Net) 5,023 4,693 3,580Operating Profit/(Loss) (1,071) 361 165Profit Before Tax (1,046) 413 182Net Profit for the year (825) 268 128
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