Star Health: ₹2,210 Crore Block Deals, 3 FDI Investors Offload Stake

A substantial 4.1 crore shares, representing 7.05% of Star Health Insurance's equity, were traded at ₹535 per share in a pre-market block deal on Thursday, May 23, amounting to ₹2,210.5 crore. The identities of the buyer and seller involved in the block deal remain undisclosed. Star Health shares closed 0.79% lower at ₹549 per share on Wednesday, May 22, prior to the block deal.

CNBC-TV18 reported on Wednesday, May 22, 2024, citing sources that existing investors in Star Health Insurance Ltd., a company founded by the late Rakesh Jhunjhunwala, are planning to sell their stakes in a block deal.

Sources reported that MIO Star, APIS Growth, and ROC Capital, the existing shareholders, were likely to sell their stake in the deal.

As per sources, the block deal could be worth $250 million to $270 million and the price band for the same could be between ₹530 to ₹545 per share, which is around the current market price for the stock.

According to the shareholding pattern for the March quarter, MIO, through two of its entities, held a 4.6% stake in Star Health. APIS Growth held a 2.6% stake, and ROC Capital owned 1%. Within the promoter group, 14.16% of the equity is attributed to Rakesh Jhunjhunwala, the renowned investor. Rekha Rakesh Jhunjhunwala held a 3.05% stake at the end of the March quarter.

The company's stock exchange debut occurred in December 2021, with an initial public offering (IPO) price set at ₹900 per share. Since then, the stock has plummeted by 40%, making it one of the poorest-performing IPOs in the post-pandemic period.

Trading activity in the counter surged as four lakh shares were exchanged, surpassing the one-week average of two lakh shares. This surge was driven by the block deals. Star Health's financial performance in FY24 was robust, with a net profit of ₹845 crore, reflecting a 37% increase. The company's Gross Written Premium (GWP) also saw a significant rise, climbing by 18% to ₹15,254 crore.

The combined ratio for FY24 amounted to 96.7%. Its claim ratio for FY24 stood at 66.5%. Gross written premium reached ₹15,254 crore in FY24 and its net worth for FY24 totaled ₹6,339 crore.

Star Health and Allied Insurance Company Limited is an India-based health insurance company. The Company provides health insurance products to individuals, families and corporates, directly and through various channels, such as agents, brokers, online and digital channels like Web aggregators, fintech and others. It also provides bancassurance products. Its product categories include retail health, group health, personal accident and travel insurance.

The Company's retail products include family health optima insurance plan, star comprehensive insurance policy, medi classic insurance policy (individual) and senior citizens red carpet health insurance policy. Its retail products are offered to individuals, families, students, elderly individuals and those with prior medical conditions, within the broad middle market segment. Its group health products provide coverage for corporate employees. It has around 835 branch offices spread across 25 states and five union territories in India.