Star Health IPO share allotment likely today. Here’s how to check your allotment status

Star Health IPO | Promoter Rakesh Jhunjhunwala is the second largest shareholder in the company.

Rakesh Jhunjhunwala-backed Star Health and Allied Insurance Company, which closed its initial public offering on December 2, is expected to finalise the share allotment on December 7.

Most investors are likely to be allotted shares as the issue received 79 percent subscription. The company received bids for only 3.56 crore equity shares against an offer size of 4.49 crores.

The Rs 7,249-crore public issue managed to meet the minimum criterion of 75 percent subscription but failed to get fully subscribed even after the closing time was extended by a few hours for investors (barring QIBs).

Qualified institutional buyers (QIBs), who are the key investors in every public issue, have to bid at least 90 percent of their reserved portion. They subscribed for 1.03 times the reserved portion of 75 percent.

Also read: Why Rakesh Jhunjhunwala-backed Star Health’s IPO failed to enthuse investors

Retail investors bid 1.1 times the portion set aside for them, while non-institutional investors and employees’ portions were subscribed only 19 percent and 10 percent.

The offer comprised fresh issue of Rs 2,000 crore, and an offer-for-sale of Rs 5,249 crore, which will get reduced to the extent of undersubscription, by selling shareholders, including Safecrop Investments India LLP. The issue price could get finalised at the upper price band of Rs 900 a share.

How to check share allotment?

Investors can check their share allotment either on the BSE website or IPO registrar’s website.

On the BSE website, the allotment status can be checked through these three steps:

1. Select the issue type (Equity) and the issue name (Star Health and Allied Insurance Company Limited)
2. Enter the application number and the Permanent Account Number (PAN)
3. Finally check the box (I’m not a robot), and click on the search button

1. Select IPO (Star Health and Allied Insurance Company Limited) in the dropdown menu
2. Select and enter the application number, or DPID/client ID, or the PAN
3. Finally, enter Captcha and click on the submit button

Unsuccessful investors will get refunds in their bank accounts by December 8 and shares will get credited to the demat accounts of eligible investors by December 9. Trading in the shares is likely to commence on the BSE and NSE from December 10.

As the issue was not fully subscribed, there is no grey market premium, according to data from IPO Watch and IPO Central. In fact, it was said to be trading at a discount.

Overvaluation and the company’s loss-making status could be the reasons for the tepid response to the IPO, which came on the heels of a disappointing listing by Paytm.

Star Health claims to be the largest private health insurer in India, with a market share of 15.8 percent in FY21. In FY21 and the six months ended in September 2021, it had total gross written premium of Rs 9,348.95 crore and Rs 5,069.78 crore, respectively.

The company reported a loss of Rs 825.58 crore in FY21 on the back of COVID-related claims, against a profit of Rs 268 crore in FY20. Loss in the six-month period ended September 2021 stood at Rs 380.27 crore against a profit of Rs 199.3 crore in the corresponding period last fiscal.