Rakesh Jhunjhunwala Stock Hits Fresh Lifetime Low: What Should You Do With The Stock?

Shares of Star Health and Allied Insurance hit fresh low for the 4th consecutive day today. The stock in trade on Tuesday (June 28, 2022) hit a fresh low of Rs. 507.15 per share on the NSE. This when compared to its IPO price band of Rs. 870-900 per share implies a significant correction of over 43%.

As of March 31, 2022, Rakesh Jhunjhunwala owns 14.4% stake in the firm. Additional stake of 3.11% in the entity is held by his wife Rekha Rakesh Jhunjhunwala. Interestingly, the stock of Star Health which made its debut in December last year has been under pressure on a continuous basis.

Experts' take on the stock of Star Health

Experts suggest that Star Health promoted by Rakesh Jhunjhunwala is incurring losses owing to the pandemic. Further, higher valuations of the scrip resulted in its weak debut and then continuous fall thereafter. Likewise, the current dip is seen as an opportunity for long term investors. Nevertheless, experts suggest positional investors to further wait and watch as the stock is seen to correct more from current levels. The suggested buying range for the scrip is Rs. 455-475 per share.

"As we can see, the stock has been steadily declining since listing of its initial public offering. Revenue is also down after the pandemic decline phase. However, margins are also under pressure. Still, the stock appears weak; it has significant support near ₹450 levels. So, one can buy between ₹455 to ₹475 maintaining stop loss around ₹419 for long term target of ₹675 per share", Ravi Singhal, Vice Chairman at GCL Securities shares his views on the buying range for the stock.