Should star health hold or sell after IPO listing

 Should you invest in Star health stock for long term?

Star health insurance is one of the best company in India especially into the retail health insurance segment. Company is also backed by Indian stock market big bull mr. Rakesh jhunjhunwala with nearly 17% stake into the star health insurance company. If Company has such a good business in India so why Star health IPO had not received good response in Indian stock market? Even Investors like west bridge capital is still holding the stake into star health but still not good response from retail investors as well as institute investors. Now if you were IPO bidder in Star health insurance then few questions are surely coming up into your mind that should you hold or sell star health stock after listing?  Should you sell Star health stock? Even some investors are thinking what they should do if Star health IPO will list on discount price of IPO? Let us try to find of the answers of this question in very easy way. First we have to understand what kind of business Star health insurance Company is doing?

Star health insurance business model & Growth outlook of the company:

Company was incorporated in the year of 2006.  Star Health and Allied Insurance Company Ltd or Star Health is one of the biggest private health insurers in India. Star Health Company has mainly focuses on the retail health insurance market segment of India. Star health Company has wide verity of flexible and comprehensive options for retail health customers, corporate health groups, personal accident, and travelling abroad insurance too. These days’ people have more focus on health insurances. Due to covid19 pandemic, more people are aware about health insurances. Also travelling aboard is becoming trend in India from last many years and people want to take travel insurance too.  Company also offers services like, in House settlement claim, cashless scheme. As per  Star health company management, more than 3.5 lacs agents are working for company and more than 5 million claims has been settles down by the company.  Star health insurance has tie ups with more than 11,000 hospitals in India. Moreover, Company has strong presence into the corporate as well as in the retail segment of the health insurance sector.

Question:

What are the positive points of star health Insurance?

Answer:

1) Star health insurance company has very strong presence in India especially in the retail & corporate health insurance segment.

2) Big bull Rakesh jhunjhunwala has nearly 17% holding in the company. More positive is that mr. Rakesh jhunjhunwala is not going to sell the stock for IPO listing of star health. There will not be offer for sale.

3) Big investment firms like Safecrop Investments India LLP and Westbridge AIF are also invested into the company.

4) Company had locked  market share of 15.8 percent in FY21 & also In FY21 and the six months ended September 2021, star health company  had total gross written premium of more than  Rs 9,345 crore & nearly  Rs 5,065 crore respectively.

5) Growth rate of the company is very good & Promoters of the company are very experienced in their business.

Question:

What are the Negative points of Star health insurance?

Answer:

1) Star health Insurance IPO was highly over priced at price band 870rs to 900rs, we can say company is asking very high valuation from Indian market.

2) Star health offer size was 4.49 crore but bids for this IPO was received only 3.56 crore. It is a biggest negative point for the company. It means IPO price of star health was not attracting Investors even having strong company management.  Only subscription of only 79% is not promising. Even QIB portion had subscribed at par or we can say hardly subscribe by 1times on last day of issue. Star health issue was not fully subscribed, therefore this IPO is not getting premium but still some sources are expecting 10rs to 20rs premium on opening. But not sure.

3) One of the biggest negative in star health is that in March 2021, Company management had issued shares to one of the promoter at 489rs & within 8 months company management is asking IPO price of 900rs from retail investors in Indian market. It is not fair. Even Company had made loss in last few years.  One more important thing is that to whom company management had allotted shares at 489rs they are selling their stake. This is really very negative.

4) Company had made financial loss in FY21 & in the current year too. But before FY21, star health insurance company as in profit.

5) Due to Covid 19 pandemic, Company had settled more health insurance claims which had reflected into the company financial results.

6)  Company management is asking valuations even more than ICICI Lomb. Who is a Market leader of health insurance sector in India?

7) Star health insurance company had reported net loss of nearly Rs 825crore in the financial year of 2021 against a profit of Rs 268 crore in FY20. Loss in the 6 month time period ended September 2021 still at Rs nearly 380.27 crore against a profit of Rs 199 crore in the corresponding period last fiscal.

Question:

Should you sell Star health stock?

Answer:

If you are luck and get listing gain by any mean then try to book the profit on listing which looks very rare unless any good news does not come into the market before or after its IPO listing. As per our research star health share overvalued therefore book the profit if you get it in any case.

Question:

 Should I buy Star health stock?

Answer:

There is nothing bad into the star health insurance company. Even company is in the hands of strong management and growth outlook of the company is also promising but At the higher IPO price band of 900rs, it looks very expensive. If you want to invest in Star health stock then try to accumulate the stock at lower price levels of 10% to 15% at least and invest for at least 2 years of time frame.

Question:

What is the long term price target of star health share?

Answer:

Star health is fundamental good company if after listing any investor gets a chance to enter at lower levels then we may expect 900rs to 1000rs price levels in the company years of 2 to 3 years .We are giving such target price levels if star health stock will come down 15% to 20% in any market correction.

 Question:

What investors should do if they got shares allotment of Star health insurance IPO?

Answer:

Unless any good news does not come into the star health stock on or after IPO listing, movement in the stock will be slow. If some will get profit on listing then book profit or trail stoploss with 2% of your risk taking ability.  if you want to buy star health share then buy at lower levels.   In Any case If star health stock comes to 760rs to 800rs levels (we are not promising it will come at those levels) then it will be good to start accumulate star health in small number of sets for long term investment

Our recommendation on Star health Stock:

Star health share is for investors of high risk with low returns. But if some get entry to lower levels then we may say that investors can get low risk with moderate returns.

Exceptional case for star health stock?

Investors should also keep this thing into their mind that anything can happen in IPO’s listing. Stock market more depends on news. Similarly In most the cases stocks of the company also give up & down movement on the bases of news. Therefore it is advisable to our website viewers those got shares allotment of Star health, Do not press panic button. If you liked IPO price at 900rs per share only then you had applied for it. Risky IPO bidders may try to accumulate or add star health share at lower levels and sell on rise.

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