Tag: star health & allied insurance company

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Tata Chem’s Net Profit Falls 12% YoY to Rs 523Cr in Q1 – Top Indian Market Updates

Here are some of the major updates that could move the markets tomorrow:

Tata Chemicals Q1 Results: Net profit falls 12% YoY to ₹523 crore

Tata Chemicals Ltd reported an 11.8% YoY decline in net profit to ₹523 crore for the quarter ended June (Q1 FY24). Net profit stood at ₹593 crore in Q1 last year. Its consolidated revenue from operations stood at ₹4,218 crore, up 5.6% YoY. EBITDA increased 2.8% YoY to ₹1,043 crore in Q1. As on 30 June 2023, consolidated gross debt dropped to ₹5,873 crore, as compared to ₹6,296 crore as of March 31, 2023.

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Adani Energy Solutions gets financial closure for $1B project

Adani Energy Solutions Ltd (AESL) announced financial closure for its $1 -billion green high voltage direct current (HVDC) link project. It will enable further ‘greening’ of the Mumbai Grid by supplying more renewable power to the city while supporting its rising electricity demand. The 80 km multi-faceted project’s construction work for this link will begin in October this year. The credit facility is part of the $700 million revolving project finance facility tied up in October 2021 for its under-construction transmission assets portfolio.

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Reliance plans crude unit maintenance at Jamnagar complex

Reliance Industries Ltd plans to shut down a crude unit and some secondary units for maintenance in September-October. The crude units at its 704,000 barrels per day (bpd) export-focused plant will be shut down for 3-4 weeks. Reliance is the operator of the world’s biggest refining complex which houses two plants with a combined capacity of about 1.4 million barrels per day. The shutdown of units would curtail Reliance’s crude imports and may push up gasoline margins.

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USFDA issues Form-483 with zero observations for Solara Active’s Cuddalore facility

The US Food & Drug Administration (USFDA) has issued Form-483 with zero observations for Solara Active’s Cuddalore facility in Tamil Nadu. The US FDA inspected the facility between July 31 and August 4, 2023. The inspection established that the facility is in an “Acceptable State of Compliance” with Zero Form 483 inspectional observations from the Agency. With this successful inspection outcome, the current inspection classification of the Cuddalore site shall be reinstated to NAI (No Action Indicated).

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GCPL Q1 Results: Net profit falls 8% YoY to ₹319 crore

Godrej Consumer Products (GCPL) reported a 7.6% YoY fall in net profit to ₹318.8 crore for Q1 FY24. Its revenue from operations rose 10.4% YoY to ₹3,448.9 crore during the same period. EBITDA stood at ₹642.8 crore, up 23.4% YoY. The company’s India business sales grew by 9% YoY led by volume growth of 12%. 

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Star Health and Allied Insurance enters into tie-up with Standard Chartered Bank

Star Health and Allied Insurance announced its collaboration with Standard Chartered Bank to enhance its distribution network. After this collaboration, Star Health will make its health insurance products readily accessible to customers via Standard Chartered Bank’s extensive distribution network. The insurance company hopes that with 100 branches spread across 42 cities, the bank will serve as a convenient one-stop destination for its customers seeking comprehensive health insurance coverage.

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Gland Pharma Q1 Results: Net profit falls to ₹194 crore

Gland Pharma reported a 15.3% YoY fall in net profit to ₹194.1 crore for the June quarter (Q1 FY24). Net profit stood at ₹229.1 crore in Q1 FY23. However, total revenue rose 41.1% YoY to ₹1,208.7 crore during the same period. EBITDA stood at ₹294 crore, up 8.9% YoY. EBITDA margin stood at 24.3% in the reporting quarter as compared to 31.5% in the corresponding period in the previous fiscal. 

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EaseMyTrip board approves raising ₹149 cr on a preferential basis

EaseMyTrip’s board has approved raising up to ₹149 crore through a preferential issue of equity shares. The company’s board has also approved the issuance of 3.37 crore preferential shares at ₹44.32 per share. This is at a discount of 9.5% to today’s closing price of ₹40.10. Recently, Easy Trip Planners Ltd had announced plans to acquire a 51% stake in Guideline Travels Holidays India Private Ltd, Dook Travels Private Ltd, and Tripshope Travel Technologies Private Ltd.

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Apraava Energy inks pacts with REC, PFC to get Rs 9,120 cr finance for its projects

Apraava Energy has inked initial pacts with REC Ltd and Power Finance Corporation (PFC) to get finance of ₹9,120 crore. The funding is for wind, transmission, and advanced metering projects in the country. The signing of MoUs took place as part of the Green Finance Summit organised by REC. The summit was on the sidelines of the Green Business Summit Clean Energy Ministerial (CEM) and Energy Transition Working Group (ETWG) Ministerial held on July 21, 2023, in Goa.

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Market News Top 10 News

UltraTech Cement’s Profit Falls 36% YoY to Rs 1,666 crore – Top Indian Market Updates

Here are some of the major updates that could move the markets on Tuesday:

UltraTech Cement Q4 Results: Profit falls 36% YoY to Rs 1,666 crore

UltraTech Cement reported a 36% YoY fall in net profit to Rs 1,666 crore for Q4 FY23. However, its revenue from operations rose 18% YoY to 18,562 crore during the same period. The company’s  EBITDA for the quarter stood at Rs 3,444 crore, up 9% YoY. The company’s board has recommended a dividend of Rs 38 per equity share.

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India’s core sector output grows 3.6% in March

India’s core sector output grew 3.6% YoY in March 2023, down from 6% growth in the previous month. The production of coal, fertilizers, steel, natural gas, and refinery products increased during the month. The Eight Core Industries account for 40.27% of the weight of items included in the Index of Industrial Production (IIP).

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Laurus Labs Q4 Results: Profit falls 56% YoY to Rs 103 crore

Laurus Labs reported a 56% YoY fall in net profit at Rs 103 crore for Q4 FY23. Total revenue stood at Rs 1,381 crore, a 3.1% decline from Q4 FY22. EBITDA fell 28% YoY to Rs 285.6 crore, and EBITDA margin stood at 20.7% in Q4 FY23. The company’s board approved a second interim dividend of Rs 1.20 per equity share of Rs 2 each.

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Adani pays back $200 million Holcim debt, seeks loan extension

Adani Cement Industries has pre-paid $200 million from the $1 billion mezzanine loan it took from global banks to fund the acquisition of Ambuja Cements and its subsidiary ACC Ltd from Switzerland’s Holcim Group for $6.4 billion. The pre-payment will help Adani seek an extension of the debt taken to fund the acquisition by three years.

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DLF Cyber City Developers buys 26.43% stake in Suncloud Solar

DLF Cyber City Developers Ltd (DCCDL) has acquired a 26.43% stake in Suncloud Solar Private Ltd for Rs 8.41 crore. The acquisition was made through one of its wholly-owned subsidiaries, DLF Info City Chennai Ltd. Suncloud Solar is a special-purpose vehicle of Cleantech Solar India OA 2 Pte. Ltd., and it is responsible for the construction, operation, and maintenance of a captive generating plant.

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Star Health Q4 Results: Net profit at Rs 619 crore

Star Health and Allied Insurance reported a net profit of Rs 619 crore for Q4 FY23, in contrast to a loss of Rs 1,041 crore in Q4 FY22. The gross written premium (GWP) for Q4 FY23 was Rs 12,952 crore, a 13% YoY increase. The operating expense to GWP ratio was 15.9% in FY23, and the company’s solvency ratio was 2.14x, higher than the minimum regulatory requirement of 1.5x.

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Thermax bags Rs 271 crore order for mechanical balance of plant works

Thermax has received an order worth Rs 271.50 crore from India’s largest private sector oil refinery for mechanical balance of plant (MBoP) works for the captive power plant at their new oil-to-chemical (O2C) facility in western India. The captive power plant is expected to meet the incremental power demand of upcoming projects at the customer’s premise as part of the O2C expansion and the establishment of a mega factory.

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PI Industries announces twin acquisitions in Pharma API, CDMO space

PI Industries Ltd has acquired Therachem Research Medilab LLC’s Indian subsidiaries and assets in the US for $50 million. Its subsidiary, PI Health Sciences Ltd, signed the definitive documents, and up to $25 million has been committed in performance-linked pay-outs over the next six years. The acquisition will allow PI Industries to enter the pharma API and CDMO spaces.

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CarTrade Tech Q4 Results: Profit at Rs 17.5 crore, revenue grows 19% YoY

CarTrade Tech reported a consolidated net profit of Rs 17.49 crore for Q4 FY23 compared to a net loss of Rs 21.39 crore in Q4 FY22. The revenue for the quarter grew by 19% YoY to Rs 116.6 crore. The adjusted EBITDA for Q4 FY23 was Rs 39.83 crore. CarTrade Tech received 34 million average monthly unique visitors for Q4 FY23, of which 86% were organic.

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India’s forex reserves fall $2.17 billion to $584.25 billion

According to the Reserve Bank of India (RBI), India’s foreign exchange reserves decreased by $2.165 billion to $584.248 billion as of April 21, 2023. The country’s forex reserves had risen to a nine-month high of $586.412 billion the previous week. The dip was largely attributed to a decrease in foreign currency assets, which fell by $2.146 billion to $514.489 billion.

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Mankind Pharma IPO subscribed 15.32 times

The ₹4,326-crore initial public offering (IPO) of Mankind Pharma was subscribed 15.32 times on the final day of bidding. The shares of the Delhi-based pharmaceutical and healthcare products maker are expected to list on the leading stock exchanges BSE and NSE on May 9, 2023.

Read more here.

NOTE: The Indian markets will be closed on Monday (May 1) on account of Maharashtra Day.

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Editorial

Star Health & Allied Insurance Company Ltd IPO: All You Need to Know

Health insurer Star Health & Allied Insurance Company has launched its initial public offering (IPO) today— Nov 30. It will be the sixth insurance company to go public in India. In this article, learn more about Star Health and its IPO. 

Company Profile – Star Health & Allied Insurance Company Ltd

Star Health & Allied Insurance Company Ltd is one of the largest private health insurers in India, with a market share of 15.8% as of FY21. It primarily focuses on the retail health and group health segments, which accounted for 89.3% and 10.7%, respectively, of its total gross written premium (GWP) in FY21. [GWP is the total premium (both direct and assumed) written by an insurer before deductions and remitting commissions]. 

Coverage Options Offered by Star Health:

  • Retail health insurance— Paid for by private individuals or families through out-of-pocket expenses or private insurance. 
  • Group health insurance— Paid for by employers, typically in the form of company health insurance plans. Such policies may involve co-payments by employees. 
  • Government health insurance— Paid for by the government, typically in the form of central or state government health insurance
  • Personal accident
  • Travel insurance

The Chennai-based company distributes its policies through individual agents and corporate agents. As of Sept 31, 2021 (Q2 FY22), its network distribution included 779 health insurance branches across 25 states and 5 union territories (UTs) in India. Star Health has also built one of the largest health insurance hospital networks in our country, with more than 11,778 hospitals.

Star Health’s promoters include ace investor Rakesh Jhunjhunwala and private equity firms Westbridge Capital, Safecorp Investments India LLP.

About the IPO

Star Health’s public issue opens on November 30 and closes on December 2. The company has fixed Rs 870-900 per share as the price band for the IPO.

The fresh issue of shares (of the face value of Rs 10 each) aggregates to Rs 2,000 crore. The IPO also includes an offer for sale (OFS) of 5.8 crore shares by promoters and early investors. Individual investors can bid for a minimum of 16 equity shares (1 lot) and in multiples of 16 shares thereafter. You will need a minimum of Rs 14,400 (at the cut-off price) to apply for this IPO. The maximum number of shares that can be applied by a retail investor is 208 equity shares (13 lots). 

Star Health will utilise the net proceeds from the IPO to augment/boost its capital base and maintain solvency levels. The company also aims to benefit from listing in terms of enhancing visibility and brand image. 

The total promoter holding in the company will decline from 66.22% to 58.42% post the IPO.

Financial Performance

Star Health has been facing setbacks amidst the Covid-19 pandemic and fared poorly in FY21 and even the half-year ended September 2021 (H1-FY22). The company reported a net loss of Rs 825.6 crore in the financial year 2020-21 (FY21), compared to a net profit of Rs 268 crore in FY20. Total income stood at Rs 7,568.8 crore in FY21, up 36.3% year-on-year (YoY). Star Health settled and paid 1.5 lakh Covid-19 claims amounting to Rs 1,528.6 crore last year.

The health insurer had a solvency ratio of 1.52 as of September 2021, compared to the Insurance Regulatory & Development Authority of India’s (IRDAI) prescribed level of 1.50. The solvency ratio tells us whether an insurance company has the money to settle all claims at the time of liquidation. Higher solvency ratios indicate more capability of paying insurance claims during uncertain times, which gives more confidence to an insuree. To learn more about vital ratios related to the insurance sector, click here. The company had Rs 650 crore of outstanding debt liabilities as of Q2 FY22.

The company posted a 27.5% CAGR growth in the number of policies issued in FY21. It also reported a 31.4% CAGR increase in gross premiums, which stood at Rs. 9,349 crore in FY21. Star Health stands out among other standalone health insurers in terms of size, strong growth in gross written premium, and better operational performance.

Risk Factors

  • The Covid-19 outbreak has severely affected the company’s business and operations. Any potential future waves and effects of the Covid-19 pandemic on customers in terms of infection and need for hospitalisation will result in higher claim payments.
  • Any negative publicity could have an adverse impact on Star Health’s business and financial condition. 
  • The unavailability or inaccuracy of data provided by customers could limit the functionality of insurance products and disrupt business.
  • The failure to develop and grow its distribution network of agents in a cost-effective manner could harm its overall operations. Moreover, the inability to maintain relationships with its existing hospital network could negatively impact its financial performance.
  • There are outstanding legal proceedings involving Star Health, its directors, and promoters.
  • Increased competition in the insurance sector could lead to aggressive pricing and adversely impact the company’s business.
  • Star Health will be forced to stop transacting any new business or change its strategies if it does not meet the solvency ratio requirements prescribed by IRDAI.

IPO Details in a Nutshell

The book-running lead managers to the public issue are Axis Capital, BofA Securities India, Citigroup Global Markets, CLSA India, Credit Suisse Securities (India), and more. Star Health & Allied Insurance Company Ltd had filed the Red Herring Prospectus (RHP) for its IPO on November 19. You can read it here. Out of the total offer, 75% is reserved for Qualified Institutional Buyers (QIBs), 15% for Non-Institutional Investors (NIIs), and 10% for retail investors.

Ahead of the IPO, Star Heath raised Rs 3,217.13 crore from 62 anchor investors. The marquee investors include the Monetary Authority of Singapore, The New Economy Fund, Baillie Gifford Pacific Fund, Abu Dhabi Investment Authority, Morgan Stanley, Edelweiss, IIFL Special Opportunities Fund, etc.

Conclusion

According to a report from CRISIL Research, the retail health market segment is expected to emerge as a key growth driver for the overall health insurance industry in India. Factors such as low penetration of health insurance and high out-of-pocket expenses for healthcare costs would ultimately lead to better business for insurance firms. Moreover, only 10% of the Indian population has insurance policies outside of government plans. Star Health could benefit from the growth in this sector with its diversified product portfolio, which has a strong focus on innovation and specialised products.  

However, the company has been reporting losses ever since the emergence of the Covid-19 pandemic (due to higher claims). A further impact of the pandemic could lead to higher claims. Moreover, an increase in competition could negatively impact its profitability. Star Health will be directly competing with leading players such as ICICI Lombard General Insurance Company and New India Assurance Co. once it gets listed.

Based on negative earnings and past losses, the issue price seems to be aggressively valued. Star Health’s IPO shares are trading at a Grey Market Premium (GMP) of just Rs 10 in the unofficial market. Before applying to this IPO, wait to see if the portion reserved for institutional investors gets oversubscribed. As always, consider the risks associated with the company and come to your own conclusion.

What are your opinions on this IPO? Will you be applying for it? Let us know in the comments section of the marketfeed app.