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Star Health Insurance share listing may 'disappoint' allottees, say experts - Mint

Shares of Star Health Insurance are going to list on NSE and BSE today. According to stock market experts, due to higher pricing the public issue got tepid response and Star health share price debut on Dalal Street may disappoint the lucky allottees. Expecting Star Health share listing at a discount of around 5 to 10 per cent, market experts went on to add that Star Health share price today may debut at around 810 to 850 per equity share at Dalal Street.

Expecting Star Health share listing a disappointing event for lucky bidders; Abhay Doshi, Founder at said, "As the D-Street is witnessing rain of IPOs, a mixed and selective subscription to different issues. Star Health Insurance received a very tepid response at the time when other IPOs are getting highly oversubscribed. The tepid response was mostly on account of higher pricing which made investors wary which may make its debut to a lack-lusture one. The shares may list at 5-10 per cent discount, disappointing the allottees."

Echoing with Abhay Doshi's views; Abhay Agarwal, Founder at Piper Serica — a SEBI registered PMS said, "We expect the listing to at a discount of about 10 per cent. At lower than that, buying will emerge from anchor investors who would like to reduce their cost of acquisition. IPO applicants have got almost full subscription. Short-term traders looking for quick gain will be disappointed as we do not expect the stock to trade at a premium for the foreseeable future."

Sharing Star Health share listing range; Manoj Dalmia, Founder Director at Proficient Equities Limited said, "Star Health Insurance is suffering from losses due to huge claims post-Covid-19 pandemic. The Rakesh Jhunjhunwala-backed IPO may list at around 810 to 850 logging up to 10 per cent loss for those who got Star Health shares through allotment process."

Aayush Agrawal, Sr. Research Analyst - Merchant Banking, Swastika Investmart Ltd. said, "Star Health Insurance, the largest private-sector health insurance company got poor response due to expensive valuations, dent in profitability due to Covid-19 and fragile sentiments post a weak listing of Paytm. The listing is expected on a poor note, however, the long-term outlook for the industry and Star health insurance is promising therefore we can expect buying interest at lower levels."

Aprajita Saxena, Research analyst at Trustline Securities said, "Star Health is one of the largest private health insurers in India with a market share of 15.8 per cent in FY21 has the largest distribution network, diversified product suite. However, Company has deteriorated financial metrics as indicated by losses in FY21 and H1 FY22. Valuation-wise, Star Health seems overvalued in comparison to its listed peers. Due to weak sentiments, there could be no listing gains and listing would be at a issue price Rs. 900 on the Stock Exchange."

Star Health IPO GMP

Grey market is also giving weak signals in regard to Star Health IPO listing. According to market observers, Star Health IPO grey market premium (GMP) today is minus 60 that means the unofficial market is expecting Star Health share listing at around 840 ( 900 - 60), which is in sync with the expected listing by stock market experts.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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