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Home / Markets / Star Health IPO opens for subscription today. GMP, key details. Should you apply?
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The initial share-sale of Star Health and Allied Insurance Company will open for subscription today and conclude on December 2. The price band has been set at 870-900 per share for its initial public offering (IPO). Star Health on Monday said it has raised a little over 3,217 crore from anchor investors ahead of its IPO.

As of 1:47 pm on day 1 of the bidding, Star Health IPO has been subscribed 0.09 times with retail investors category booked 0.49 times, BSE data showed.

Star Health's IPO comprises fresh issue of equity shares worth 2,000 crore and an offer for sale of up to 58,324,225 equity shares by promoters and existing shareholders. At the upper end of the price band, the public issue is expected to fetch 7,249 crore.

As per market observers, Star Health shares premium (GMP) have fallen to 10 in the grey market. The company plans to list on leading stock exchanges BSE and NSE on December 10.

"We view STAR’s valuations at 8.2x Sep 2021 BV favorably in comparison to similar levels for ICICI Lombard, as we expect STAR to continue to grow at much higher growth rates while maintaining decent ROE in the post covid era. We recommend subscribing to the issue from a long term perspective," said Nirmal Bang in an IPO note.

Star Health, leading private health insurer in the country, is owned by a consortium of investors like Westbridge Capital and Rakesh Jhunjhunwala.

The valuations commanded by Star Health are in-line with recent deals in the SAHI space and appears fair considering its positioning. Hence, we recommend Subscribe from a long-term perspective only, as per brokerage house Angel One. 

Incorporated in 2006, Star Health and Allied Insurance Company Ltd (Star Health) is one of the largest private health insurers in India. The company primarily focuses on the retail health market segment. It offers a range of flexible and comprehensive coverage options for retail health, group health, personal accident, and overseas travel.

Meanwhile, those at Choice Broking have a Subscribe with Caution rating on the IPO as they said “Pandemic despite positively impacting business growth, has impacted the profitability severely. In future occurrence of new virus wave or emergence of new variant will be a concern for the profitability. However, the risk will be lower as compared to levels witnessed during H1 FY22."

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