homemarket Newsstocks NewsHaven't sold any shares in Star Health IPO, have full confidence in management: Rakesh Jhunjhunwala
Haven't sold any shares in Star Health IPO, have full confidence in management: Rakesh Jhunjhunwala
Shares of Rakesh Jhunjhunwala-backed Star Health and Allied Insurance Company made a tepid debut at the exchanges on Friday. The ace investor said that health insurance is a nascent industry in India and Star Health has a 31 percent market share in retail health insurance - the reason he never sold any shares in the IPO.
Shares of Star Health and Allied Insurance Company made a tepid debut at the exchanges on Friday. Backed by billionaire investor Rakesh Jhunjhunwala, the stock listed at a 6 percent discount over its issue price of Rs 900. On the NSE platform, the scrip opened at Rs 845; while on BSE, it started trading at Rs 848.80.
The ace investor told CNBCTV-18 that even though near-term factors do affect the perception of valuation, he has full confidence in the management of Star Health and thus have not sold any shares in the IPO of Star Health insurance.
"Health insurance is a nascent industry in India and star health has a 31 percent market share in retail health insurance. I invested in Star Health 30 months ago and industry dominance is one of the reasons I never sold any shares in the IPO,” Jhunjhunwala told CNBCTV-18.
The country's largest private health insurer cut the size of its IPO to Rs 6,400 crore from Rs 7,249 crore earlier after a subdued response to the IPO last week.
"It was not a very intensely bid process but it was an intensely complicated process because there was a dispute between the promoters who wanted to sell to us. And it took 18 months for us to complete the transaction. If I would have listened to the lawyers, I would have never completed it. The growth without profitability has no purpose. So the essential idea is to have profit. COVID is once in a lifetime situation, I don't think it is going to occur again, in my opinion, it's all dead except the noise," he added.
Read More: Rakesh Jhunjhunwala-backed Metro Brands IPO opens today: Should you subscribe to the issue?
“There is a good succession plan in place in the company and there is hope it will do well in future and hence I have retained my stake in Star Health.”
However, Rakesh Jhunjhunwala said that he is not participating in any public issues. "I am not participating in any of the public issues, so it makes no difference to me and the merchant bankers are the ones who are advising the valuations."
He also remains bullish on the equity market. "I think we'll see a positive market next year also," said Jhunjhunwala.
For the full interview, watch the accompanying video.
First Published: Dec 10, 2021 11:52 AM IST
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