Star Well being Insurance coverage: The Indian insurance coverage sector in India for lengthy existed with just one dominating participant i.e. LIC. As time progressed new personal gamers have joined in.
At present, the insurance coverage business of India has 57 insurance coverage corporations 24 are within the life insurance coverage enterprise, whereas 34 are non-life insurers. Among the many life insurers, Life Insurance coverage Company (LIC) is the only public sector firm.
Because the emergence of the Covid 19 In March 2021, medical health insurance corporations within the non-life insurance coverage sector have elevated by 41%, pushed by rising demand for medical health insurance merchandise amid the COVID-19 surge.
This offered a sectoral enhance and enchancment within the development prospects for the insurance coverage gamers planning to capitalize on this momentum.
On this article, we’re going to cowl the fixed fall within the costs of Star medical health insurance and the occasions that led to it.
About Star Well being Insurance coverage IPO
Star Well being and Allied Insurance coverage raised Rs 7,249 crore at a problem worth of Rs900 per fairness share. From an investor perspective, the corporate was aggressively priced.
As the corporate has posted losses within the final 18 months. Therefore the PE can’t be ascertained because of the damaging earnings.
Regardless of having Rakesh Jhunjhunwala on their promoter aspect, Star Well being and Allied Insurance coverage IPO had a lukewarm response from buyers.
On Dec 10, 2021, their shares opened at a reduction of 6% however recovered within the intraday to achieve the excessive of Rs 940 and closed simply above the difficulty worth.
However the share has by no means reached the identical top since then!
What’s The Lop Aspect?
Rakesh Jhunjhunwala having the 14.98% stake within the firm earned Rs 5,418 crore or 421% revenue from his funding within the Star Well being and Allied Insurance coverage Firm.
As the massive bull had a median buy worth of Rs 155.28 per share which was made previous to the IPO. Whereas the retail buyers are nonetheless on the lookout for a means out of the deal that went dangerous for them.
A Deal Went Unhealthy Or Alternative In Disguise
Since itemizing the Star Well being and Allied Insurance coverage Firm has proven a relentless fall. At present, the inventory is already down over 22 %, exhibiting no indicators of restoration.
Daily Star Well being is becoming a member of the likes of final 12 months’s disappointments of Zomato, Nyka, Paytm, and so forth.
Massive Bull’s Views On Star Well being
Rakesh Jhunjhunwala has already made his stance clear by not liquidating his holdings after the staggering positive aspects within the IPO. This exhibits his intent to remain invested for the long run.
He believes profitability is the important thing to development. Subsequently, with good management and being the dominant participant within the insurance coverage area, the target needs to be to show round this parameter within the firm’s favor.
The ace investor has additionally additional elevated his stake to 17.5% in January exhibiting his bullishness over the inventory.
What Future Holds For Star Well being?
Wanting on the present state of affairs, the Insurance coverage sector appears to have promising development. These prospects are linked to alternatives resulting from current penetration in main fragments of areas.
This presents a good state of affairs for the Star Well being and Allied Insurance coverage Firm. The corporate already dominates the sector by means of its massive distribution networks.
Star Well being and Allied Insurance coverage Firm are additionally extra centered on majorly serving the general public offline through brokers giving it accessible penetration to distant areas.
Star Well being and Allied Insurance coverage Firm have confronted the difficulty of overvaluation which was later corrected by the market.
What About Retail Traders?
Because the begin of the 12 months, retail buyers have already taken hits within the type of the liquidity crunch, Ukraine-Russia disaster. These externalities have added to the already bearish development.
Some buyers panicked with some exiting the markets, this additionally presents a possibility to purchase “high quality” shares at dips. Final 12 months got here with a bullish development and was later joined by overvaluations.
However now fixed fall out there presents a possibility for the buildup of high quality shares. The Star Well being and Allied Insurance coverage firm might additionally become one in all these shares.