Jhunjhunwala-backed Star Health IPO sees 20% subscription on Day 2

The initial public offer (IPO) of Rakesh Jhunjhunwala-backed Star Health and Allied Insurance Company continued to see the tepid response from investors on the second day of the bidding on Wednesday.

The issue saw 20 percent subscription as of 5:00 pm, data on NSE showed. Investors applied for 89,67,776 shares against on offer 4,49,08,947 shares.

The IPO comprises a fresh issue of equity shares worth Rs 2,000 crore and an offer for sale of up to 58,324,225 equity shares by promoters and existing shareholders. The public offer includes a reservation of shares worth Rs 100 crore for employees.

The issue, with a price band of Rs 870-900 a share, closes tomorrow.

At the upper end of the price band, the initial share sale is expected to fetch Rs 7,249.18 crore. Proceeds from the fresh issue would be used to augment the company’s capital base.

Analysts are cautious on the IPO, given its pricey valuation, but some suggest it could be a good long-term bet.

Ahead of the IPO, the company decided to allocate a total of 3,57,45,901 equity shares to 62 anchor investors at Rs 900 apiece, aggregating to Rs 3,217.13 crore, according to a circular uploaded on the BSE website.

The Monetary Authority of Singapore, Government of Singapore, Abu Dhabi Investment Authority, Morgan Stanley Asia (Singapore) Pte, Goldman Sachs (Singapore) Pte, BNP Paribas Arbitrage, and Societe Generale are among the anchor investors.

In addition, SBI Life Insurance Company, HDFC Life Insurance Company, and Edelweiss Mutual Fund have been allocated shares.

About 75 percent of the issue size has been reserved for qualified institutional buyers (QIBs), 15 percent for non-institutional investors, and the remaining 10 percent for retail investors.

Leave a Reply

Your email address will not be published. Required fields are marked *