STAR HEALTH IPO

IPO Details:

Price Band: 870-900

Cutoff Price: 900

About Company:

Star Health is the largest private health insurer in India with a market share of 15.8% in the Indian health insurance market. The company mainly distributes policies through individual agents and also includes corporate agent banks and other corporate agents.

Competitive Strengths:

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

2. One of the largest and well spread distribution networks in the health insurance industry and an integrated ecosystem that enables the company to continue to access the growing retail health insurance market.

3. Diversified product suite with a focus on innovative and specialized products.

4. Strong risk management focus with domain expertise driving a superior claims ratio and quality customer service.

5. Substantial investment in technology and innovative business processes.

6. Consistently demonstrated superior operating and financial performance.

7. Experienced senior management team with strong sponsorship.

Strategies:

1. Continue to leverage and enhance market leadership in the attractive retail health insurance segment.

2. Continue to enhance existing distribution channels and develop alternative channels.

3. Continue product innovation and provide value-added services.

4. Utilize the digitization of the business to improve operational efficiencies and customer service.

5. Drive profitability by leveraging scale and further improving financial performance.

6. Respond to the challenges posed by COVID-19 Pandemic and adapt to the post-COVID-19 environment.

Financial Performance:

Revenue of the company increased significantly in the last few years but the company was in loss last year. Company P/E can't be computed. P/B is around 14.5 which seems to be overvalued.

Objects of the Issue:

The Net Proceeds from the Issue are proposed to be utilised in the following manner:

1. Offer for Sale

Competitors Comparison:

There are no health insurance company listed in India. So competitor analysis can't be done.

Grey Market Premium:

Our view: GMP of the IPO is not good. Valuation seems to be high. I will not subscribe to this IPO.

Disclaimer: Views are shared for an educational purpose. Please consult your financial advisor or planner before taking any action based on the views or facts shared on this blog.

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