Star Health Company Analysis And Review For IPO & Should You Apply For Star Health IPO?
Star Health company IPO is in the talks because of Rakesh Jhunjhunwala. Currently, the market is going down due to the new strain of covid. We also have seen what happened with Paytm IPO and talks are also in the market that, this could happen with Star Health. There is much speculation about the company IPO already in the market. We will break down company details and we will also explain everything about IPO then together we can come to a conclusion.
You will get to know about the company in this article. We will start from company basics and then IPO details. Later we will take a brief look at the company's financials and then we can come up with a final call on this IPO. What should we do, should we apply for it or not?
Company Details
Star Health Company was founded in 2006. The promoters of the company are Rakesh Jhunjhunwala, Safe Crop Investments India LLP, and Westbridge AIF 1. The company mostly deals in health insurance, personal accidents, overseas travel insurance, etc. We won't explain each and every detail about the company. You will only get to know about company details which are essential to know for the IPO analysis because this article is about the IPO review. Star Health has a very good network of the hospital, which helps it come to the top of the health insurance network of India.
This is good because if we see it from the customer perspective, customers are getting good network support from the company. If customers are satisfied with the company insurance claim network then that is very good from the business perspective of the company. Customers will trust the company for health insurance and the company will have more business. The company has more than 12800 employees which tells us about the size of the company, star health has 640+ branches in India. So this was about the company that we needed to know. Now we shall look at the company IPO details.
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IPO Details Of Star Health
The company is starting from 30th November. Star Health's stock price band will be from 870-900. IPO size is ₹ 7249 crores, fresh issue of ₹2000 crores. The QIB has 75%, NII has 15% and retailers will have 10% of the share quota in star health. The sales offer is 5,83,24,225. You will get 16 shares in one lot and that will cost you 14400. The maximum you will get is 208 shares if you apply for the IPO under the retailer's quota. You will get to know about the allotment status on 7th December and on 8th December your amount will be refunded if you didn't get the IPO allotment. The stock listing on the BSE and NSE will be 10th December and the face value of each stock will 10rs.
A Look At Company Financials
This is the part where all this gets messy about this IPO. The company is backed by good promoters. Overall good customer satisfaction, good employee satisfaction, good hospital network but here company have a very bad and messy situation. Let us look at this table first then we will discuss it further.
|
|
2019 |
2020 |
2021 |
|
Revenue |
226 |
462 |
-908 |
|
Expense |
44 |
49 |
138 |
|
P&L |
128 |
268 |
-826 |
In this current fiscal, till 30th September. The company has faced a loss of -380 crores rupees. This tells us the financial condition of the company which is trembling now. The reason behind this is very obvious, covid-19. We can not take it for granted because the company for the last 18 months hasn't shown any positive results and which is a sign of worry. Company before corona was doing very good. In the 2020 result, we can see it. Double revenue from 2019 and expense is the same, The covid might come again and currently due to the higher claim ratio company financials are not good at all. We have to consider this and this is the major reason that tells us that we should avoid this IPO. The current new strain of covid-19 has already shaken the market on Friday. If this IPO comes into the market with lower GMP then it can face the muddle. People might get this stock at a discount price later.
If we analyze the company properly, we have found out that the company has very good long-term potential but due to previous 18-month negative income results and possible claims that might come due to corona, The corona has not gone yet so we just can't speculate. We have to put this IPO on a risky note, You can apply for the IPO if you still feel that this is good. The company surely has good long-term potential.
Key Features Of The Company
- Largest health insurance network
- One of the largest health insurance providers
- Backed by Rakesh Jhunjhunwala.
We are keeping this IPO on the avoid side. Rest you can make your own decision, if you have read this article till here you have the proper view about this company. If you like the article please share this with your friends, colleague, and family members who might be interested in investing.
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