With Composite insurance bill on the verge of getting approved , there was news that LIC is interested to enter retail health insurance space. LIC will get cross sell opportunity with its retail life insurance policy. So market probably thinking it about a threat to Star Health. But execution will be the difference over long term. Star Health is also wants to diversify into Motor Insurance and Term Life.
But real point is Star Health to my best estimate is being fairly valued by market. Further increment to share price will be based on its business growth. Star Health’s capital raise and valuation in the past will give some idea.
- At current market cap of 36220 Cr and FY24 Gross Premium of 15254 cr. GWP to market Cap multiple stand at 2.54 times. Market share within general insurance industry stand at FY24 was 4.76%.
- GWP to Market Cap is a good measure compared to PE. Star has a float of around 15500 Cr. Investment income alone touching 900 cr per year and ever increasing.
- M&A on Indian Standalone health insurance space has track record of providing GWP to valuation multiple of 1.2 time to 1.5 times.
- in FY18 ttk Sold its entire stake in ttk Cigna. ttk Cigna Gross Premium was at 346 Cr at FY18. Valuation given is 500 Cr. TTK stake was taken over by Manipal group. GWP to valuation multiple given at 1.4 times.
- Before IPO in April-2018 Rakesh Jhunjhunwala and Icici Lombard was in race to pick up stake, Rakesh Jhunjhunwala and other picked up stake at a valuation of 6000 Cr . FY2018 Gross Premium was 4100 cr. So GWP to Valuation multiple of 1.5 times given. Star Health’s market share within general insurance space for FY18 was 2.75%.
- In Sept-2016 , Apis Partner and ICICI Venture bought 15% stake in Star Health. Star health valued at 2100 Cr that time . FY16 GWP was 2007 Cr. so GWP to Market Cap multiple given was 1 times. Market Share was around 2.3% that time.
Disc : Invested
| Subscribe To Our Free Newsletter |
