Rakesh Jhunjhunwala has earned a staggering Rs 5,418 crore or 421% profit from his investment in the newly listed Star Health and Allied Insurance Company. On the other hand, IPO investors holding shares of the private insurer have suffered a 10% loss on their investment. Big bull Rakesh Jhunjhunwala is a promoter in Star Health and Allied Insurance, along with Safecrop Investments India and Westbridge AIF. Big Bull Jhunjhunwala owns a 14.98% stake in Star Health or a total of 8.28 crore equity shares. Star Health and Allied Insurance Company’s share closed at Rs 809 per share on Wednesday, down from the IPO price of Rs 900 apiece.
According to Star Health’s Red Herring Prospectus (RHP), Rakesh Jhunjhunwala acquired his 14.98% stake in the company in a staggered manner, buying shares between March 2019 and November 2021. The average purchase price of Rakesh Jhunjhuwala-owned 8.28 crore shares, according to the RHP, is just Rs 155.28 per share – an 83% discount to the upper end of the IPO price band.
Rakesh Jhunjhunwala’s investment in Star Health and Allied Insurance Company
Number of shares: 8.28 crore
Average purchase price: Rs 155.28 per share
Wednesday’s closing price: Rs 809 per share
Total returns: 421%
Total cost of acquisition: Rs 1,287 crore
Current stakeholding value: Rs 6,705 crore
Total gain: Rs 5,418 crore
Apart from Rakesh Jhunjhunwala, his wife Rekha Jhunjhunwala also owns 1.78 crore equity shares of the company or a 3.23% stake in Star Health and Allied insurance. The same is valued at Rs 1,454 crore.
On the other hand, IPO investors have not had a pleasant journey with Star Health stock so far. Investors who were allotted one lot of Star Health shares for the IPO price of Rs 900 per share at a minimum investment of Rs 14,400 have lost Rs 1,400 in less than one week of trading.