Shares of Star Health & Allied Insurance Co. jumped 7.5% in intraday trade after the billionaire Rakesh Jhunjhunwala-backed company partnered CSC to make health insurance accessible in rural India. The stock trimmed gains to close 2% higher.
Star Health and Common Services Centers, under the Ministry of Electronics & Information Technology, have partnered to provide over 5 lakh CSCs access to a select range of Star Health insurance products, designed to meet the needs of rural customers across tier-II, tier-III cities and rural markets pan-India, according to an exchange filing.
CSCs, a digital India initiative, act as access points for delivery of essential public utility services, social welfare schemes and healthcare, among others.
The deal only fueled a rally in Star Health’s stock over the past four sessions, up 18% during the period.
On Thursday, the stock had risen 12.7%, the most on record in intraday trade, after Credit Suisse initiated coverage with an ‘outperform’ rating citing large agency network, continued expansion and an attractive risk-reward ratio.
Its trading volume was nearly thrice the 30-day average, when markets closed. Despite the surge in the last four sessions, the stock is down over 28% so far this year compared with nearly 7% losses for the Sensex.
Of the 14 analysts tracking the insurer, 10 maintain a ‘buy’, one suggest a ‘hold’ and three recommend a ‘sell’, according to Bloomberg data. The 12-month consensus price target implies an upside of 31.9%.
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