STAR HEALTH FILES DRHP

The country’s largest standalone health insurer, Star Health and Allied Insurance, promoted by Safecrop Investments India, ace investor Rakesh Jhunjhunwala, and Westbridge AIF, has filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (Sebi) to raise funds through an initial public offering (IPO).

The IPO will consist of a fresh issue of ~2,000 crore and an offer for sale for 60.1 million shares by existing shareholders. Safecrop Investments India is looking to sell 30.68 million shares, and Apis Growth is looking to sell 7.68 million shares.

The net proceeds from the fresh issue will be used to augment the company’s solvency levels and boost capital. As of March 31, the company’s solvency ratio stood at 2.23x, much higher than the regulatory requirement of 1.5x.

Kotak Mahindra Capital, Axis Capital, Bofa Securities India, Citigroup Global Markets India, and ICICI Securities are the global cocoordinators and book running lead managers to the issue. This will be the first standalone health insurer to get listed on the bourses and the third non-life insurance company after ICICI Lombard and New India Assurance.

The company in its DRHP has said, due to Covid-19, awareness of health insurance products among prospective customers has increased. There is, however, no guarantee that this will continue.