Star Health aims for US$ 7 billion valuation in IPO

Indian health insurance provider Star Health and Allied Insurance Co is seeking for a valuation of about US$ 7 billion in its initial public offering, according to a banking source.

Supported by ace Indian investor billionaire Mr. Rakesh Jhunjhunwala, it is looking to raise Rs. 72.49 billion (US$ 974.23 million) and has set a price band between Rs. 870-900 (US$ 11.68-12.10) per share, according to a document from a bookrunner.

The offer will open for subscription on November 30, 2021 and comes as several firms, involving prominent startups, go public to cash in on thriving Indian stock market amidst immense liquidity and improved retail investor participation.

If fully subscribed, Star Health's IPO would be the third largest this year after fintech firm Paytm and food-delivery firm Zomato, whose offerings raised US$ 2.46 billion and US$ 1.26 billion, respectively.

The earnings will be used to develop the capital base and preserve solvency levels, according to its prospectus.

The company's shares are likely to be listed in the Mumbai market around December 10, 2021 and would make Star Health the first insurance provider to hit public markets since 2017.

Investors will keenly observe its offer subscription as Paytm's gloomy debut last week has created doubts on the upcoming IPOs and triggered concerns about overvaluation in the domestic equity market.

BofA Securities, Citi, Kotak Mahindra Capital and Axis Capital are among the book running lead managers to Star Health's public offering.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.