Star Health cuts IPO size to about $848 mn after tepid subscription

India’s largest private health insurer Star Health has cut the size of its initial public offering (IPO) to 64 billion rupees ($848.02 million) from 72.49 billion rupees earlier after a subdued response to the IPO last week, its prospectus showed.

Star Health’s IPO failed to get fully subscribed last week, signalling weak investor demand for India’s third-biggest listing this year.

Last week, a source had told Reuters that the company will cut the offer for sale portion after the weak response despite it extending the subscription period.

Backed by billionaire stock investor Rakesh Jhunjhunwala, the company had priced its IPO between 870 rupees and 900 rupees per share and a banking source had told Reuters that the company was aiming for a nearly $7 billion valuation.

The IPO now consists of fresh issue of 22.2 million shares and offer for sale of 48.89 million shares, according to the prospectus dated Dec. 7, while the issue and offer were “subject to finalisation of basis of allotment.”

Investors will be closely watching the listing which is likely on Friday after Paytm’s dismal debut in November cast doubts on the big ticket IPOs and sparked concerns about overvaluation in the domestic equity market.

Indian payments firm MobiKwik deferred its IPO plans, following Paytm’s lacklustre performance.

Other large offerings planned for later this year and the next include Softbank-backed firms Delhivery and OYO, which have filed draft papers for IPOs worth $992.73 million and $1.12 billion, respectively, and that of state-owned life insurance giant LIC, expected to be India’s biggest.

Incorporated in 2005, Star Health offers coverage options for retail health, group health, personal accidents and overseas travel insurance.

($1 = 75.4700 Indian rupees)

(Reporting by Anuron Kumar Mitra and Nallur Sethuraman in Bengaluru; Editing by Rashmi Aich)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor