Shares of Star Health and Allied Insurance Co, backed by ace investor Rakesh Jhunjhunwala, recovered after a weak stock market debut on Friday with the stock surging to a day's high of ₹940 per share on the BSE. Star Health shares were trading near its issue price of ₹900 in afternoon deals on its first day.
As one of the promoters of the company, the ‘Big Bull' who has over 14% stake in the private health insurer, as per its RHP, has made a profit of over ₹6,000 crore as the stock hit a high of ₹940 intraday. His average cost of acquisition was at ₹156 per equity share, Star Health's prospectus further showed.
Jhunjhunwala did not put up any shares for sale in the IPO. In an interview with CNBC-TV18, the investor said that even though near-term factors do affect the perception of valuation, he has full confidence in the management of Star Health and thus has not sold any shares in the IPO of Star Health insurance.
Star Health, which offers coverage options for retail health, group health, and overseas travel insurance, witnessed a subdued response to its listing subscription last week and had cut the offer for sale (OFS) size of its initial public offering (IPO). The total IPO size was reduced to ₹6,400 crore instead of ₹7,249 crore.
The initial share sale of the country's largest private health insurance firm was subscribed just 79% on the last day of bidding that closed last week. Some investors had questioned the issue price of the offering as Star Health swung to a loss in the year ended March 2021. The company had priced its IPO between ₹870-900 per share.
Another Jhunjhunwala-backed company Metro Brands has launched its share sale on Friday. The issue of the footwear retailer, with a price band of ₹485-500 per share, will conclude on December 14.
(With inputs from agencies)