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.

Funds raised from primary sale are likely to be used towards enhancing solvency and providing growth capital to the health insurer. Care Health Insurance’s solvency at the end of Q2FY24 stood at 1.73 times, where the minimum regulatory requirement is 1.5 times.

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.

Responding to CNBC-TV18’s query, Religare said, “Our primary objective is to create value for our stakeholders and customers. The news initiating work on bringing Care Healthcare Insurance IPO is a market speculation and as a policy, we do not comment on market speculation.”


Religare Enterprises 64.40%
Trishkhar Ventures 16.22%
Union Bank of India 5.40%
Anuj Gulati, MD & CEO, Care Health Insurance 4%
Rashmi Saluja, Chairperson, Religare Enterprises 1.40%
Ashish Dhawan 2.30%

As on Q2FY24, Care Health Insurance has a book value of 1,905 crore. Care Health Insurance’s competitor, Star Health Insurance, trades 5.8X price-to-book value (P/BV).


Value Of Religare Ent’s Stake

4X P/BV    7,620 Cr                                        4,907 Cr

5X P/BV    9,525 Cr                                    6,134 Cr

6X P/BV    11,430 Cr                                    7,361 Cr

7X P/BV    13,355 Cr                                    8,588 Cr

8X P/BV    15,240 Cr                                    9,814 Cr

Care Health Insurance commands a market share of 22% of the Standalone Health Insurance Industry and 2.2% of the general Insurance Industry as on September 2023. Care Health Insurance as a company is nearly half the size of Star Health Insurance but is also growing much faster. Certain financial aspects of Care Health Insurance look better than Star Health Insurance.

Gross Domestic Premium Income (GDPI) +33% +18%
Net Earned Premium (NEP) +39% +14%
Combined Ratio 98% 98.44%
Profit After Tax +40% +35%

Meanwhile, Religare Enterprises, whose shareholders received an open offer by the Burmans in September for stake purchase, has reportedly seen its independent directors levelling fraud allegations against Dabur promoters Burman family. These independent directors have written to regulators such Sebi, the insurance watchdog and the RBI, setting up the stage for a long-drawn takeover battle, according to an ET report.

A spokesperson for Burmans has rejected the accusations.

Speaking to CNBC-TV18, the Burman family said these allegations by Religare Directors are baseless and devoid of any merit. “We are surprised and disappointed at these allegations.”

“The Burman Family and its members satisfy all norms of fit and proper criteria mandated by financial services regulators and this allegation is baseless and devoid of any merit.”

“We have purchased all our shareholdings in REL through transparent market purchases and preferential allotments in prior fund-raising exercises approved by the Board of REL. There is no market manipulation,” the Burman family said.


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