Star Health and Allied Insurance Company is the second largest stock in Rakesh Jhunjhunwala’s portfolio in terms of value after gems and jewelery giant Titan Company. Since its launch in the market, the general health insurer has seen a sharp decline in its stock performance. However, this month has turned out to be fruitful for Star Health as the stock has picked up its momentum and has reached a close by Friday. 640 points. In seven trading sessions, Star Health shares have gained over 30%. Jhunjhunwala’s stock jumps on strong performance 1,452 crore in seven seasons. The stock is likely to rise further.
on Friday, star health shares closed up by 620.05 23.35 or 3.91% on BSE. Shares touch intraday highs 639 during the day. Its market cap is currently approx. 35,721.09 crores.
shares were down 500 level by the middle of last week. Shares rose on July 6 Rs 475.95 on BSE, but shares remained up since then more than 500 600 levels.
From July 6 to today, stocks have surged 144.1 or 30.28% on Dalal Street.
Rakesh and his wife Rekha are the promoters of Star Health, which falls under the Individual/Hindu Undivided Families category. By June 2022, Rakesh Jhunjhunwala He holds 8,28,82,958 equity shares or 14.39% in Star Health and he holds 1,78,70,977 equity shares or 3.10% in the name of Jhunjhunwala Rekha Rakesh. Both the portfolios are managed by Rakesh.
As of now, the couple holds around 10,07,53,935 equity shares or 17.49% in Star Health.
Star Health’s strong performance increased Rakesh’s wealth 1,451.86 crore in the company in just seven trading sessions.
As per Trendline data, as of today, Jhunjhunwala’s shareholding is rated as: 6,243.2 crore in Star Health and the second largest stock after Titan under which the total holding is 9,821 crore.
It needs to be noted that the assets in Jhunjhunwala’s portfolio move according to the price movement. Therefore, they are bound to change further.
Shares of Star Health have lost nearly 32% since it hit the stock exchanges on December 10 last year. The stock had also touched a 52-week high 940 each before making corrections during these days.
The company had launched its IPO last year at the price band between November 30 and December 3. 870 to 900 per. Demand for the IPO remained sluggish as it was not fully subscribed. Star Health’s IPO was subscribed only 79 percent of the proposed size, with a portion of qualified institutional investors and retail investors fully subscribed. It was the category of non-institutional investors that showed weak response.
Shares of Star Health are currently in recovery mode and are gaining momentum.
Earlier this month, ICICI Securities Research Analysts Anshuman Deb and Ravin Kurva in their July 3 report said Star Retail Health GDPI grew at 29% CAGR between FY18-22 vs Industry Retail Health GDPI at 18% Is. FY23-TD Growth
On a high basis of Apr/May’21, has declined to 13%. The market share stood at 30.6% on FY23-TD, up from 29% in FY22-TD (April and May 21).
He added that “no company except Star Health & Care Insurance (and HDFC ERGO which was SAHI due to the acquisition of Apollo Munich) has been able to capture significant market share in the retail health segment. The share has increased from 23%/4% in 2018 to 33%/7% in FY 2012 respectively.”
Besides, analysts said the fall in PSU market share in the retail health segment with lower solvency ratio will provide ample room for growth of strong private players like Star. The retail health market share of PSUs declined from 38.3% in FY18 to 25.9% in FY23-TD.
“Life insurers offered indemnity-based health products as of 2016. They had an indemnity product (which was long-term) as of 2013. Compared to ~8.8 million retail health policies sold by non-life insurers in fiscal 2013 About 21,000 policies were sold per year as of 2013. Even now, life insurance companies offer critical illness products. As such, with strong agency (550k agents) and hospital networks (12,820 network hospitals) as well as product innovations The star should be able to sustain any increase in competitive pressure,” the duo added.
Giving a ‘Buy’ recommendation on Star Health, the analysts conclude that “We value the stock at 40x (earlier 50x) FY24E EPS of 17.5 (earlier 16.7) basis with a revised target price of Rs 700. We GDPI CAGR is factored in. 16.5% between FY22- 24E, investment leverage of 2.3x in FY24E, combined ratio of 95%, and investment yield of 7% for FY24. Our transition to several is increased competition, post-covid waves and Shows overall growth potential. Cost of capital.”
Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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