 "V Jagannathan")
Star Health and Allied Insurance Company Limited, the country's first stand-alone insurer, plans to raise Rs 350 crore by the end of FY15 from existing investors as well as by diluting stake to foreign investors, V Jagannathan, chairman and managing director, told Business Standard on Wednesday.
This comes at a time when a Parliament select committee has recommended passing a Bill to raise the upper limit of foreign direct investment (FDI) to 49 per cent.
Star Health is backed by ICICI Venture, Sequoia Capital, Oman Insurance Company, Tata Capital, non-resident Indians and Indian business houses. At present, the investors hold 26 per cent in the company, whose capital base is Rs 549 crore.
On the government's move to increase the FDI cap in insurance, Jagannathan said: "It is very much essential considering the fact that insurance is a capital-intensive business with a turnaround time of six to seven years."
Jagannathan, who has 40 years' experience and has served as chairman and managing director of one of India's largest public-sector insurance companies, said: "At the current scenario, it is better to let the foreign capital to come in."
Star Health clocked around Rs 1,050 crore in FY14 as 'gross direct premium underwritten' and had set a target of Rs 1,500 crore for FY15. The company was largely focusing on government sponsored insurance schemes. It now deals in personal accident, mediclaim and overseas travel insurance.
Government projects are almost nil, said Jagannathan. Adding, "We hope to make profit this year." Jagannathan said the company would look at IPO in the next two years.
There are 28 general insurers in India and Star Health is one of the five companies focusing on health insurance. Other companies include Cigna TTK Health Insurance Company, Max Bupa Health Insurance Company, Religare Health Insurance Company and Apollo Munich Health Insurance Company.
Penetration of health insurance in India is expected to increase from the current 15 per cent to 45 per cent by 2020, it estimated.
