3 insurance-related firms to raise Rs 10,000 crore through IPOs

Adding more fire to the already-frenzied IPO market, three insurance sector companies are entering the primary market with initial public offerings in coming months to mop up over Rs 10,000 crore.

These companies are — PB Fintech, which runs the insurance brokerage Policybazaar; standalone health insurer Star Health & Allied Insurance Company; and third-party administrator Medi Assist Healthcare Service. They have already filed their draft prospectus with markets regulator Sebi.

Already over 40 companies have hit the IPO market so far this year, raising close to Rs 70,000 crore.

August alone saw four listings, and the fifth one (Nuvoco Vistas Corp, which raised Rs 5,000 crore) is slated for Monday and as many as 24 more have filed their IPO papers so far this month, seeking to mop up over Rs 4,000 crore.

Investment bankers are expecting more than 100 issues this year, making it the best-ever for the IPOs.

PB Fintech, the parent company of online insurance distributor Policybazaar, is looking to raise Rs 6,017 crore, which will make it the second-biggest issue so far this year after the Rs 9,375-crore Zomato issue last month. PB Fintech is backed by Tiger Global and Tencent Holdings.

Star Health, the largest standalone private health insurer, is planning to raise Rs 3,000 crore; while Medi Assist, which is the largest third-party administrator, is lining up a Rs 840-1,000 crore issue, according to their draft red herring prospectus (DRHP) filed with the market watchdog.

Also read: IPO bandwagon getting bigger and bigger; August sees 23 filings so far

While PB Fintech has filed the DRHP on August 4 (a day when four companies launched their IPOs), and Star Health did so on July 28 and Medi Assist on May 11.

Star Health, backed by billionaire Rakesh Jhunjhunwala and Westbridge Capital, is the largest standalone private health insurer with a market share of 15.8 per cent in the health insurance market in the financial year 2021.

Its public offering will consist of a fresh issue of shares aggregating Rs 2,000 crore and an offer-for-sale (OFS) of 60.1 million shares by shareholders.

Safecrop Investments India is looking to offload 30.68 million shares, followed by Apis Growth, which is looking to sell 7.68 million shares. Other investors such as the University of Notre Dame, Mio Star, Roc Capital, Sai Satish, Venkatasamy Jagannathan, Konark Trust, Bejris Minoo Desai, and MMPL Trust are also selling shares through the OFS.

PB Fintech addresses the large and highly underpenetrated online insurance and lending markets in the country through its Policybazaar and online lending platform Paisabazaar, the largest digital insurance marketplace with a 93.4 per cent market share based on the number of policies sold. In the financial year 2020, 65.3 per cent of all digital insurance sales by volume was transacted through the Policybazaar platform.

Its Rs 6,017.5-crore public issue comprises a fresh issue of Rs 3,750 crore and an offer-for-sale of Rs 2,267.5 crore by existing selling shareholders. The OFS consists of sale by investor SVF Python II (Cayman) for Rs 1,875 crore, and Rs 392.5 crore worth of shares by other shareholders.

Medi Assist is the country's largest third-party insurance administrator in terms of revenue and premium serviced. It operates a pan-India network comprising over 11,000 hospitals across 722 cities and towns.

Medi Assist has been the most popular third-party administrator (TPA) for most large hospital chains such as Apollo Hospitals, Manipal Hospital, Fortis Healthcare, Narayana Hrudayalaya and Max Healthcare, among others.

Its IPO consists only of OFS of 2,539,092 shares by Vikram Jit Singh Chatwal, Medimatter Health Management, Bessemer Health Capital LLC, and Investcorp Private Equity Fund I. The offer constitutes 40.70 per cent of the post-offer paid-up equity share capital of the company.