Star Health IPO Subscribed 79% At Close
Star Health and Allied Insurance Co.'s initial share sale sailed through even without adequate bids as the portion reserved for qualified institutional buyers was fully subscribed.
Bidding for shares of billionaire investor Rakesh Jhunjhunwala-backed private insurer was extended after the issue wasn't fully subscribed.
The company raised Rs 6,410 crore, which is 88% of the total fundraising it sought via the compulsory book building, including the portion reserved for anchor investors.
The cut-off time for uploading of bids was extended up to 6 p.m. for non-institutional investors, while retail and employee categories were extended till 7 p.m.
Portions reserved for retail and institutional investors were fully subscribed, while those reserved for non-institutional investors and employees remained undersubscribed.
According to market regulations, if the issue is through mandatory book building route, at least 75% of the net offer must be allotted to qualified institutional buyers. The company shall refund the subscription money if the minimum subscription for QIBs isn't attained.
In the case of Star Health's IPO, the QIB portion was fully subscribed. Hence, the issued sailed through with over 93.11 lakh shares undersubscribed.
The undersubscribed portion will be returned to the promoters and selling investors.
The private health insurer's IPO comprises a fresh issue and an offer for sale, according to its red herring prospectus. It will sell shares at Rs 870-900 apiece, seeking a market value of Rs 51,806 crore at the upper end of the price band.
The company had successfully placed Rs 3217.13 crore to anchor investors ahead of the IPO.
Of the net offer, 75% is reserved for qualified institutional buyers, 15% for non-institutional buyers, and 10% for retail investors.
Promoter and promoter group shareholding will fall to 58.4% after the share sale, while the public will own the rest. Jhunjhunwala, one of the promoters, will not dilute his stake.
The Chennai-based company will use the proceeds from the fresh issue to augment capital base and maintain solvency levels.
Subscription Details: Day 3
The IPO was subscribed 0.79 times or 79% as of 5 p.m. on Dec. 2.
Institutional investors: 1.03 times.
Non-institutional investors: 0.19 times.
Retail investors: 1.08 times.
Employees: 0.10 times.
Research Reports On Star Health IPO:
Investment Rationale, Future Growth Strategies, Key Strengths, Risks: KRChoksey
Play On Structural Health Insurance Opportunity: ICICI Direct
Investment Rationale, Financials, Valuations, Key Risks: Nirmal Bang
Watch BloombergQuint's IPO Adda with Rakesh Jhunjhunwala-backed Star Health Insurance Management:
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