Rs 1,312 Crore Sold In Jhunjhunwala-Backed Health Insurance Firm, Stock Zooms 4%

Health insurance stock, Star Health and Allied Insurance Company on Tuesday rallied nearly 4% on BSE after a block deal where investors sold equity shares worth over Rs 1,312.55 crore. The Jhunjhunwala family are the largest promoters of Star Health under the individuals and Hindu undivided family (HUF) category. Year-to-date, Star Health shares jumped by 7%, but in a year, the stock has plunged over 14% on BSE.

On BSE, the stock traded at Rs 627.70 apiece, up by Rs 16.15 or 2.64% at the time of writing. The stock gained by nearly 3.6% with an intraday high of Rs 633.55 apiece. Its market cap stood at Rs 36,531.53 crore.

Data from BSE showed that MIO IV Star sold 3,401,639 equity shares at Rs 610.2 per share, aggregating to Rs 207.57 crore in the block deal on August 28.

While ROC Star Investment Trust offloaded to the tune of 1,496,721 equity shares at Rs 610.2 per share -- amounting to Rs 91.33 crore.

Further, investor University of Notre Dame DU LAC made the highest selling in the open market during the latest block deal. The Notre Dame-based company together sold 1,66,11,840 equity shares at Rs 610.2 apiece, totalling Rs 1,013.65 crore.

These investors together have offloaded Rs 1,312.55 crore of equity shares of Star Health.

As of June 30, 2023, MIO IV held 2,12,91,948 equity shares or 3.66% in Star Health, while ROC Capital held 88,35,710 equity shares or 1.52%, and University Of Notre Dame Du Lac held 1,84,70,792 equity shares or 3.17%.

On Monday, on the opposite, many companies including life insurance giant ICICI Prudential showed keen interest in Star Health shares. In the block deal, ICICI Prudential Life Insurance picked up 3,900,000 equity shares of Star Health at Rs 610.20 apiece, aggregating to Rs 237.99 crore. Meanwhile, Fidelity Investment Trust Fidelity Series Emerging Markets Fund purchased 12,376,100 equity shares at Rs 610.20 apiece, to Rs 755.19 crore. Also, funds affiliated with Fidelity have invested in Star Health.

ICICI Prudential and funds affiliated with Fidelity together purchased a 3.7% stake in the Jhunjhunwala-backed firm.

As of June 2023, late market mogul Rakesh Jhunjhunwala holds a 14.24% stake in Star Health, while his wife Rekha who is currently managing the entire shareholding, holds 3.07% alone. Together, the couple's shareholding in Star Health stood at 17.32% as of June 30, 2023.

Star Health is among the top 10 most valued stocks in Jhujhunwala's portfolio. As of August 29, 2023, the couple's shareholding is valued at nearly Rs 1,118 crore in Star Health as per Trendlyne data.

As per Trendlyne, the analysts' average price target suggests a 10% upside. Currently, the stock's RSI is in the mid-range of Rs 42.2, while its MFI is strongly overbought to 13.5. The 50-day and 100-Day SMA is at Rs 611.4 and Rs 591.5 respectively. Beta 1-year is 0.26%, indicating low volatility.