Star Health IPO - Subscription Day 2

5paisa Research Team 5paisa Research Team 7th December 2021 - 09:16 pm

The Rs.7,249 crore IPO of Star Health & Allied Insurance, consisting of a fresh issue of Rs.2,000 crore and an offer for sale (OFS) of Rs.5,249 crore, saw tepid response on Day-1 of the IPO, which has continued on Day-2.

As per the combined bid details put out by the BSE at the close of Day-2, Star Health & Allied Insurance IPO was subscribed 0.20X overall, with decent demand coming in only from the retail segment but virtually no action seen in the HNI counters or the QIB counters. The issue closes for subscription on 02nd December.

As of close of 01st December, out of the 449.09 lakh shares on offer in the IPO, Star Health saw bids for 89.68 lakh shares. This implies an overall subscription of 0.20X.

The granular break-up of subscriptions was dominated by the retail investors while the HNIs and QIB response were almost absent. However, the QIB bids and NII bids are expected to gather momentum on the last day, as is the general trend in the IPO market.

Star Health & Allied Insurance IPO Subscription Day-2

Category	Subscription Status
Qualified Institutional Buyers (QIB)	0.07 Times
Non Institutional Investors (NII)	0.02 Times
Retail Individuals	0.89 Times
Employees	0.05 Times
Overall	0.20 times

QIB Portion

Let us first talk about the pre-IPO anchor placement. On 29th November, Star Health & Allied Insurance IPO did an anchor placement of 3,57,45,901 shares at the upper end of the price band of Rs.900 to 62 anchor investors raising Rs.3,217.13 crore.

The list of QIB investors included a number of marquee global names like Government of Singapore, Monetary Authority of Singapore, Ballie Gifford, BNP Paribas, Goldman Sachs, Janchor Partners, Universities Superannuation Fund and Abu Dhabi Investment Authority (ADIA). Domestic anchor investors included HDFC Life, Max Life, Bharat AXA Life, IIFL Opportunities Fund, Mirae MF and Edelweiss Mutual Fund; among others.

The QIB portion (net of anchor allocation as explained above) has a quota of 238.31 lakh shares of which it has got bids for 15.83 lakh shares on Day-2, implying subscription of just 0.07X for QIBs at the close of Day-2. QIB bids typically get bunched on the last day but the heavy demand for the anchor placement forebodes well for the Star Health IPO subscription overall.

HNI / NII Portion

The HNI portion got subscribed 0.02X (getting applications for 2.83 lakh shares against the quota of 119.15 lakh shares). This is a very tepid response on Day-2 but of course this segment normally sees the maximum response bunched on the last day. Bulk of the funded applications and corporate applications, come in on the last day of the IPO.

Retail Individuals

The retail portion was subscribed a more decent 0.89X at the end of Day-2, showing reasonable retail appetite. It must be noted that retail allocation is only 10% in this IPO.

For retail investors; out of the 79.44 lakh shares on offer, valid bids were received for 70.39 lakh shares, which included bids for 55.63 lakh shares at the cut-off price. The IPO is priced in the band of (Rs.443-Rs.453) and will close for subscription on 02nd December 2021.