Rakesh Jhunjhunwala-backed Star Health IPO makes tepid market debut – in line with Anil Singhvi estimate

The shares of Rakesh Jhunjhunwala-backed Star Health and Allied Insurance witnessed a tepid stock market debut on Friday, December 10, 2021. The stock listed below the issue price of Rs 900 per share, exact in-line expectations of Zee Business Managing Editor Anil Singhvi and other analysts. 

The counter listed at around a 6 per cent discount to Rs 848.8 per share on the BSE and Rs 845 per share on the NSE. It made a 52-week high of Rs 910.9 per share on the BSE and Rs 911 per share on the NSE during the early morning trade on Friday. 

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Immediate after listing, the scrip witnessed buying interest, wherein at around 10:11 am, it is up 5 per cent to Rs 894.5 per share on the BSE, and 7 per cent to 910 per share from listing price. 

#StarInsuranceIPO की सुस्त लिस्टिंग,
NSE पर ₹845 पर लिस्ट, और BSE पर ₹848.8 पर लिस्ट#IPOListing | #IPOAlert | #StarInsuranceWealth pic.twitter.com/f0blEwFz8O

— Zee Business (@ZeeBusiness) December 10, 2021

The market analyst and Head of Research at Swastika Investmart Ltd, Santosh Meena pointed out, “Those who applied for this IPO should hold it for the long term while those who are looking for a fresh entry should give some time to know at what level it manages to attract demand.” 

He added, “The long-term outlook for the industry and Star health insurance is promising therefore we can expect buying interest at lower levels but it is difficult to say the exact level.” 

Star Health Insurance IPO which is one of the big brands backed by big-name got a very poor response from all categories of investors especially QIB because they didn't show any interest because of expensive valuations, and hence poor listing was expected, Meena said in his comment.  

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 (IPO), which was launched between November 30 and December 1, 2021, had witnessed a poor subscription response. The offer was filled a mere 79 per cent than the issue offered. 

The issue received bids for 3.56 crore equity shares against 4.49 crore shares on offer, as per the exchange data. The retail portion of Star Health IPO, however, was subscribed 1.09 times.