Star Health And Allied Insurance Company Limited is largest private health insurer in India with a market share of 15.8% in the Indian health insurance market in Fiscal 2021, according to CRISIL Research. In Fiscal 2021 and the six months ended September 30, 2021, they had total GWP of Rs 93,489.50 million and Rs 50,697.82 million, respectively. From being the first standalone health insurance ("SAHI") company established in India in 2006, They have grown into the largest SAHI company in the overall health insurance market in India, according to CRISIL Research. The comprehensive health insurance product suite insured 20.5 million lives in Fiscal 2021 in retail health and group health, which accounted for 89.3% and 10.7%, respectively, of the total health GWP in Fiscal 2021. They are strategically focused on the retail health market segment and had retail health GWP of Rs 82,150.90 million and Rs 43,399.18 million in Fiscal 2021 and the six months ended September 30, 2021, respectively. The Indian health insurance market continues to be under-penetrated, with a health insurance penetration of only 0.36% of GDP in 2019, compared to the global average of approximately 2.0% of GDP, according to CRISIL Research. India has one of the lowest health insurance densities globally, based on per capita premium, at US$5 in 2019, according to CRISIL Research. A number of demographic factors, including increasing life expectancy and population growth in India, as well as the high portion of out of pocket expenses as a percentage of total healthcare expenditure by patients in India (62.67% in 2018), are driving the need of healthcare services and the growth in the health insurance industry in India, according to CRISIL Research. Star Health distributes Company health insurance policies primarily through individual agents, which accounted for 78.9% of the GWP in Fiscal 2021. Individual agents are the primary method of distribution in the health insurance industry, since health insurance is largely an assisted product in which customers often require help in selecting the policy best suited to their needs and during the claims process. As of March 31, 2021, they had the largest number of individual agents among SAHI insurers, at approximately three times that of the SAHI company with the next highest number of agents, according to CRISIL Research. The total number of individual agents grew at a CAGR of 27.3% from 0.29 million as of March 31, 2019 to 0.46 million as of March 31, 2021 and was 0.51 million as of September 30, 2021. As of September 30, 2021 the distribution network had grown to 779 health insurance branches spread across 25 states and 5 union territories in India. Company's existing branches are also supplemented by an extensive network of over 562 Sales Managers Stations ('SMS'), which are small individual service centres, and over 6,892 in-house sales managers, as of September 30, 2021. Other origination channels include distribution by direct online sales through telemarketing and the website, brokers, insurance marketing firms and web aggregators. As per financial performance, Star Health And Allied Insurance has posted total income/net profits of Rs 226.25 Cr / Rs 128.23 Cr (FY19), Rs 461.96 Cr / Rs 268.00 Cr (FY20), Rs (907.77) Cr / Rs (825.58) Cr (FY21) and Rs (494.68)Cr / Rs (380.27) Cr (H1 F22). So company has posted good growth, but since FY21 company has suffered setback and shown negative earnings. They have posted an average EPS of Rs. 0.91 and average RoNW of 7.79% for last 3 fiscals. Issue is priced at a P/BV of 15.56 as per NAV of 57.83 on 30.06.21. As Company is making losses, so there is no measure to check, if it is fairly price or not. As per RHP, Comparison between listed peers are shown in above table. On BRLM's front, 12 lead managers are associated with this IPO, and have handled around 157 IPO in last three fiscals. From last 10 IPOs, four is opened below issue price and remaining are opened above issue on the day of listing. As of now, five are trading below issue price and other are trading above issue price. ( As on 24.11.21) As per financials, SHAICL has shown sales growth negative earnings and RoNW is (23.69)%. The general insurance sector is growing at good rate and expected to do well in future also and being leader in private health sector, company may outperform sector growth. This sector is expected to grow at good rate and its highly competitive segment with local and branded players. Performance of BRLM is average. So, we are giving NEUTRAL rating to this IPO.
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