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It may be noted the country's first standalone health insurance company already backed by PE majors including ICICI Venture and Sequoia Capital.
While two sources who are directly involved in the deal have confirmed that the fund is agreed to infuse the money for a minority stake, Star Health Chairman Cum Managing Director V Jagannathan said it is too early to comment. The sources said the fund is agreed to infuse $23 million and in the next few weeks deal will be signed.
It may be noted, already Sequoia Capital invested around Rs 140 crore in Star Health Investments Pvt Ltd (a SPV floated to promote Star Health Insurance) for around 40%, while ICICI Venture invested around Rs 130 crore for a 24% stake directly in Star Health Insurance. Some of the other major investors include Oman Insurance, Essa Abdullah Alghuair and other individuals.
The sources said the fund infusion is to support company's premium target for 2012-13.
According to Insurance Regulatory and Development Authority (Irda) data, between April and December 2012, Star Helath has reported a 31% drop in gross premium underwritten to Rs 586.05 crore from Rs 856.11 crore, a year ago.
Commenting on the numbers, Jagannathan said that “we cannot compare the previous year numbers since in 2011-12 the company had two State Governments – Tamil Nadu and Andhra Pradesh – businesses, which moved from the company's hands”.
The insurer was a partner for Tamil Nadu and Andhra Pradesh Governments to offer health care policy for people below poverty line (BPL). But now the company lost both the accounts which was clocking around Rs 1400 crore premium.
“If you compare the market business, we have done well as against Rs 500 crore last year, so far we have done Rs 800 crore and will end the fiscal with Rs 900 crore,” said Jagannathan.
He said that despite the market is tough, the company managed to report the growth in the market business due to the service and the product pricing.
