Ace investor Rakesh Jhunjhunwala-backed Star Health and Allied Insurance Company's shares recovered lost ground after a weak debut on Dalal Street on Friday. Star Health shares rose to as high as Rs 940 apiece each on stock exchanges BSE and NSE, a premium of 4.4 percent over the issue price, after listing at a discount of around six percent.

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The Star Health stock gave up most of those gains, but managed to finish the day in the green. Star Health shares closed at Rs 906.85 apiece on BSE, a premium of 0.8 over the issue price. On NSE, the stock settled at Rs 901, a premium of 0.1 percent.

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Star Health began its journey in the secondary market earlier in the day, at Rs 848.8 apiece on BSE and Rs 845 on NSE.

The weak listing of Star Health and Allied Insurance - which is owned by a consortium of investors such as the Big Bull, Jhunjhunwala, and Westbridge Capital - reflects the trend seen in the grey market in the past few days.

"We have to understand that at what level the market will be comfortable at... Expensive valuations and the dent in profitability due to COVID were key concerns for investors," said Parth Nyati, Founder of Tradingo.

He suggests investors looking to buy Star Health shares afresh to wait, and those who eyed a listing gain in the IPO to exit. "However, the long-term outlook for the company is bullish thanks to the strong brand name and low penetration of health insurance in India... Long-term investors should be patient and hold the stock," Nyati added.

Ravi Singhal, Vice Chairman at GCL Securities, expects the Star Health stock to decline going forward.

"One should take a fresh position around Rs 725-750 for six months for a target of Rs 1,000-1,100 with a stop loss at Rs 640," he said.

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Star Health's IPO saw an overall subscription of 79 percent, receiving bids for 3.6 crore shares as against the 4.5 crore shares on offer. The public offer was available for bidding from November 30 to December 2,

The portion reserved for retail investors was subscribed 1.1 times and that for qualified institutional buyers one time. The non-institutional investors' category saw a subscription of 19 percent.

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(Edited by : Ajay Vaishnav)

First Published:Dec 10, 2021 1:23 PM IST