India’s first and largest private standalone health insurance provider, Chennai-based Star Health Insurance, which is backed by ace investor Rakesh Jhunjhunwala and private equity firms Westbridge Capital and Madison Capital has filed its DRHP ( draft red herring prospectus ) with market regulator Sebi for a big-bang initial public offer, industry sources with knowledge of the matter told Moneycontrol.
If plans fructify, Star Health Insurance would become the first pure play health insurance player to debut on the Indian bourses.
On 20th January, 2021, Moneycontrol was the first to report the firm’s listing plans.
“ The papers have been filed with the regulator and it will be a big issue. The fresh issue component is around Rs 2,000 crore and the larger offer for sale component will be finalised based on the valuations ,” said one of the individuals cited above.
“ The listing will facilitate a partial exit for the key investors and will also mop up growth capital for the firm,” said a second individual confirming the filing.
“ Star Health Insurance is a fast growing firm and had reached the desired size and scale to explore a big listing,” added a third individual.
“ A long list of 12 investment banks are working on this issue, namely Kotak Investment Banking, Axis Capital, BofA Securities, Citi, ICICI Securities, CLSA, Credit Suisse, IIFL Capital, Dam Capital, SBI Capital, Ambit Capital and Jefferies,” a fourth individual told Moneycontrol adding that Cyril Amarchand Mangaldas and Trilegal were the legal advisors.
All the four individuals spoke to Moneycontrol on the condition of anonymity.
Moneycontrol has sent email queries but could not elicit an immediate comment from Star Health Insurance and its investors. The advisors could not be reached immediately. This article will be updated as soon as we hear from all the parties.
Star Health Insurance has been a key beneficiary of the COVID-19 induced spike in the demand for health insurance policies. The firm counts Max Bupa, ICICI Lombard, HDFC Ergo, Bajaj Allianz and New India Assurance as its peers in the segment. Religare Enterprises is also planning a Rs 2,000 crore IPO for its health insurance subsidiary Care Health Insurance, according to reports.
THE RAKESH JHUNJHUNWALA INVESTMENT PHILOSOPHY
“The management of Star Health has built its leadership position in private health insurance through innovation, perseverance and excellence. I believe health insurance is a key tool for every citizen towards financial stability. I am proud to be associated with Star Health and believe it is best equipped to serve the country’s health insurance needs” Rakesh Jhunjhunwala had said post the acquisition of around 90 per cent stake in the firm in August 2018 along with Westbridge Capital and Madison Capital.
THE JOURNEY SO FAR
Star Health, the brainchild of V Jagannathan (who earlier headed United India Insurance) was founded in 2006 and provides health insurance, overseas mediclaim and personal accident policies. As of October 2020, the firm, a market leader in the standalone health insurance segment, had a 52 percent market share.
Its focus area is retail health insurance, where it commands a market share of 30 percent. It is now the country’s fourth-largest private insurer in the non-life space with a market share of 4.36 percent as of August 2020 and a network of more than 9,500 hospitals.
According to its website, it had underwritten a gross written premium of Rs 6,865 crore during FY 2019-20 and had more than 12,800 employees and 640 branch offices all over India. Between April and November 2020, the insurer had underwritten gross direct premium of around Rs 5,600 crore. It had sold close to 43 lakh policies as against 30 lakh policies in the same period of the previous fiscal.
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