After successfully completing a ₹2,320 crore One Time Settlement (OTS) for Religare Finvest, parent Religare Enterprises is likely to have initiated the initial public offering (IPO) process for its health insurance subsidiary-Care Health Insurance.
According to sources privy to the development, Care Health Insurance has invited investment bankers to make IPO mandate pitches. IPO mandate pitches for Care Health Insurance IPO are expected to go on over next one month. Care Health insurance provides health, travel and personal accident insurance policies.
Health contributes 91% of Gross Domestic Premium Income (GDPI) and 88% of Net Earned Premium (NEP) to Care Health Insurance. Travel contributes 2.4% of GDPI and 3.4% of NEP and Personal Accident (PA) contributes 6.2% of GDPI and 8.5% of NEP to Care Health Insurance.
Sources aware of the development said that Care Health Insurance could look to raise anywhere between ₹1,500-2,000 crore from the IPO, which could see about 15-20% of equity dilution. Also, Care Health Insurance IPO could have both secondary as well as primary sale of shares. Sources say that Religare Enterprises will also pare down its stake and raise funds from Care Health Insurance’s IPO. Other investors would also exploring options to sell their stake through the IPO.
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