Hindustan Times (Lucknow)

GIC leads ₹1,200 cr round in Star Health ahead of IPO

- Swaraj Singh Dhanjal swaraj.d@livemint.com

MUMBAI: Star Health and Allied Insurance Co Ltd, the health insurer backed by billionair­e Rakesh Jhunjhunwa­la and Westbridge Capital, raised around ₹1,200 crore in a preIPO funding round led by Singapore’s state investor GIC, two people aware of the developmen­t said.

“The funding was closed earlier this quarter. GIC led the funding with around ₹600 crore investment, and Capital Group, which is one of the big FIIs (foreign institutio­nal investors) in the Indian stock market, invested around ₹300 crore. A few other public market investors also participat­ed in the round, and so did the existing investors of the company,” said one of the two people cited above, requesting anonymity.

“This is one of the biggest private investment­s in an insurance company during the pandemic and shows strong investor interest in the company despite the insurance industry overall facing headwinds because of the pandemic and rising claims. Star Health has seen one of the highest growths in the industry in gross premiums in FY21, and the company’s finances remain strong despite a challengin­g year,” he added.

Star Health reported a 36.7% growth in its gross premiums in FY21, higher than the 27.1% growth rate it clocked in the previous fiscal. At the end of FY21, the insurer’s solvency ratio, a measure of an insurance firm’s ability to meet its liabilitie­s, increased to 2.22 from 1.88 at the end of the previous fiscal year. Regulatory requiremen­ts mandate a solvency ratio of 1.5.

According to the second person cited above, work on the company’s draft IPO document is at an advanced stage and is expected to be filed with the markets regulator soon.

Mint reported last week that Star Health hired 10-12 investment banks for its IPO, including Kotak Mahindra Capital, Citibank, Credit Suisse and Bank of America. The IPO is expected to be around ₹2,000-3,000 crore in size, with the company expecting to get a valuation of over $3 billion for its public market debut, Mint reported. Emails sent to Star Health, GIC and Capital Group remained unanswered.

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