Thread by @myfinology

STAR Health - a rockSTAR or a flopSTAR? 🤔

Ace Investor #RakeshJhunjhunwala has made a stellar 500% returns from his investment in Star Health in just over two yrs!

Should u invest in #starhealthipo ? 🛡️

Read ths interesting thread to find out 🧐
(1/11) 🧵

#Investment #stock

Star Health is India's oldest and largest standalone health insurer (SAHI) with a 15.8% market share.

Its Gross Written Premium for FY21 was ~ 60% more than the GWPs of all the four other standalone health insurers combined - CARE, Max Bupa, Manipal Cigna, Aditya Birla!

(2/11)

Star Health’s agent network of 4.5 L+ agents is nearly 50% more than the other four SAHIs combined! 😮

These agents bring in about 80% of the business for Star (in contrast to 60% for other SAHIs).

(3/11)

Star is one of d few companies tht has defied all conventional norms:

- emerged a winner in the sector without being backed by a bank or a foreign insurer!

- offers disease-based policies to those already diagnosed & senior citizen policies without any medical tests!

(4/11)

It is the market leader in retail health insurance segment, having captured nearly 1/3rd of the market! 😵‍💫

Thus, Star ticks both the boxes of future growth prospects:

Standalone✅
Retail✅

(to find out why, read our latest Investment Insight - bit.ly/StarHealthIPOi…)

(5/11)

The company also takes pride in having the most experienced management team at the helm of its affairs [in comparison to other SAHIs] -
(6/11)

In Star Health's IPO roadshow, we put up an interesting question abt whether the company plans to innovate into the unexplored emerging territory of OPD policies.

The desk agreed to the fact that OPD policies are ‘the next big thing’ and they have plans for that as well.

(7/11)

The greatest challenge for Star (apart from what the entire sector is exposed to) is competition.

For e.g. although its market share is quite higher than Max Bupa, the latter is also catching up in terms of the premium growth rate.

(8/11)

Its incurred claims ratio has been higher in comparison to Max Bupa (and most others), thus taking its overall combined ratio higher as well.

(9/11)

In just two yrs, valuation of Star has become 6X times despite it being badly hit by d pandemic & no clear indication of d future!

In contrast to its preferential allotment made in March, valuation hs jumped over 1.5X times in d two worst quarters!

~Valuation's pricey!

(10/11)

For a more indepth analysis of Star Health, & to understand the value chain of health insurance industry, its growth prospects & challenges, and a guide on how to analyse health insurance companies, read our latest Investment Insights at Recipe -
bit.ly/StarHealthIPOi…

(11/11)