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Apis Growth, Madison Capital sell stake in Star Health via block deal

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Apis Growth, Madison Capital sell stake in Star Health via block deal

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Investors Apis Growth and Madison Capital have sold their stake in late Rakesh Jhunjhunwala-backed Star Health & Allied Insurance through a block deal on Thursday, persons aware of the matter told Mint.

The transaction value reportedly ranged between $250 million and $270 million, the persons said.

Around 41.3 million shares changed hands on the National Stock Exchange, according to Bloomberg.

The shares of the company rose as much as 6.3% intraday on Thursday, hitting their highest levels since February 2023.

This divestment follows Apis Growth’s previous sale of 10 million shares of Star Health for 553 crore in March 2024.

As of 31 March, Apis Growth held a 2.61% stake, while MIO Star and MIO IV Star (both linked to Madison Capital) held 2.21% and 2.39% stakes respectively in Star Health.

The positive investor sentiment surrounding Star Health can be partly attributed to the company’s strong financial performance. 

The company reported a 40% increase in net profit for the fourth quarter ended March, at 142 crore, compared to 102 crore in the same quarter the previous year.

The company’s gross written premium also witnessed a significant rise, reaching 4,968 crore against 4,199 crore in the year-ago period. Its net premium increased to 4,570 crore as compared to 3,993 crore.

Star Health maintained a 33% market share in the retail health insurance sector in FY24. The company’s market share among general insurance companies also grew by 22 basis points to 5.26% in the year.

The insurer improved its cashless claims payout ratio to 87% of total claims in FY24, compared to 80% in FY23. The company added over 75,000 agents in FY24, bringing the total number of agents servicing customers to over 7 lakh.

Star Health’s shares have been on a downward trend since their December 2021 debut, failing to recapture their IPO price of 900. They closed at 539.30 on 22 May, representing a decline of over 40% from the initial offering price.

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Published: 23 May 2024, 02:08 PM IST

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