Apis, Roc Star, Mio IV exit Star Health in ₹2,210 cr block deal, Mio Star dilutes stake

Apis Growth and Roc Star Investment Trust, and Mio IV Star have offloaded their entire stakes in Star Health and Allied Insurance, while another investor Mio Star has divested part of its holdings in the company. 

The sale, representing 7.06% stake of Star Health and Allied Insurance, was executed through a block deal on the National Stock Exchange (NSE) at ₹535 per share on Thursday, fetching ₹2,210.5 crore.

Apis Growth sold its 2.61% holdings, Roc Star Investment Trust divested 1.01%, and Mio IV Star exited its 2.39% stake. Notably, Mio Star, sold off a 1.05% stake, reducing its holding in Star Health to 1.16%.

Insurance giants and asset management firms bought the shares. ICICI Prudential Life Insurance Co. picked up a 2% stake for ₹626 crore, showing confidence in Star Health's future. HDFC Mutual Fund got 0.96% for ₹300 crore, East Bridge Capital Master Fund acquired 0.94% for ₹294 crore, and Plutus Wealth Management snagged 0.51% for ₹160.5 crore, all at ₹535 per share.

ICICI Securities managed the sale process. Star Health's shares rose as much as 6.3% intraday on Thursday, hitting their highest levels since February 2023.

This divestment follows Apis Growth's previous sale of 10 million shares of Star Health for ₹553 crore in March. As of 31 March, Apis Growth held a 2.61% stake, while MIO Star and MIO IV Star (both linked to Madison Capital) held 2.21% and 2.39% stakes respectively in Star Health.

Also read: Running from cover: Why Star Health is under fire

The positive investor sentiment surrounding Star Health can be partly attributed to its strong financial performance. The company reported 40% rise in net profit in the fourth quarter ended March, at ₹142 crore, up from ₹102 crore a year earlier.

The company's gross written premium also witnessed a significant rise, reaching ₹4,968 crore against ₹4,199 crore in the year-ago period. Its net premium increased to ₹4,570 crore, compared to ₹3,993 crore during the period.

Star Health maintained a 33% market share in the retail health insurance sector in FY24, while its market share, among general insurance companies, grew by 22 basis points to 5.26%.

The insurer improved its cashless claims payout ratio to 87% of total claims in FY24, compared to 80% in FY23. It added over 75,000 agents during the fiscal, taking its agents count to over 700,000.

Star Health stock has been on a downward trend since its December 2021 debut, failing to recapture the IPO price of ₹900. It closed at ₹539.30 on May 22, down over 40% from the initial offering price.

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