Rakesh Jhunjhunwala will not sell his stake till FY24: MD of Star Health Insurance in exclusive chat with Anil Singhvi

In an exclusive chat with Zee Business Managing Editor Anil Singhvi, the managing directors of Star Health Insurance Dr S. Prakash and Anand Roy discuss the plan to use the proceeds raised from the initial public offer and why the company reported losses in FY21 so far. 

Dr S Prakash, also a doctor, shared that Rs 2000 crore would be raised through the fresh issue will be used as a capital infusion to maintain solvency. “We are the only standalone health insurance company in the country empanelled with over 12000 hospitals pan India and has over 400 doctors, who process the medical insurance claims, Dr S Prakash further states. 

According to Dr S Prakash, “We have designed products that are priced at very optimal level, as all people in India can afford it.” 

Similarly, another managing director Anand Roy mentions that the company had been profitable for the last five years, except the financial year 2021, mainly due to Covid-19 and it has also been under losses due to the devastating second wave of covid struck earlier this year. 

Roy believes by the next financial year that is FY23, the company will certainly come back to profitable as we may see some impact of second-wave during this fiscal too and may face losses. 

Moreover, the company has also done two key changes in their accounting methods, wherein they have increased provisioning in the books as per the regulating norms, Roy further adds. 

On the majority of investors exiting from the company, Dr Prakash explains that the all those who are participating in offer-for-sale are PE investors, associated with us for more than 5-7 years.

The managing director further adds, the ace investor Rakesh Jhunjhunwala, who believes in the brand and the corporate governance of the company, entered as promoter investor in the company in 2019 and will not dilute stakes during OFS, at least till financial year 2024. 

The celebrity investor Rakesh Jhunjhunwala has 14.98 per cent stake, while his wife Rekha Jhunjhunwala has 3.23 per cent stake in the company.  

The initial public offer of Star Health launched on November 30 and will be active till December 02, 2021. The Rs 7249-crore IPO comprises a fresh issue of equity shares worth Rs 2,000 crore and an offer-for-sale of up to 58,324,225 shares by promoters and existing shareholders.