Established in 2007, Care Health Insurance (previously known as Religare Health Insurance), the fastest-growing health insurance company in India, is in talks with private equity investors to sell its 7% health insurance business. The company is already famous for offering quality health insurance products in the retail segment and for its unlisted shares. Religare unlisted share price has also significantly impacted the company's overall growth journey by attracting potential investors.
As the company has planned to sell its 7% health insurance business, this decision has created a buzz among investors in the unlisted share space. In this blog, we will discuss Religare's decision to sell its health insurance business and what it indicates for investors.
Without much ado, let's start.
Religare's Stake Sale Strategy
Religare Health Insurance is planning to sell its 7% health insurance business to raise Rs. 1200 crores approximately. This matter is in its initial stage as the company is seeking a very high valuation for its stake. Further, they want to make it aligned with the robust performance of the health insurance business in the country. However, one spokesperson said it might be too difficult for the company to raise such a high amount.
If we talk about the financial performance, the company reported a 32% rise in its annual gross direct payment to Rs. 5,142 crores for the Financial year ended on 31st March 2023 from Rs. 3,881 crores in 2022. In addition, the company's net written premium raised around 50% to Rs. 4,591 crores in FY23 from Rs. 3,088 crores in FY22.
Previously Sold Stake Of Care Health Insurance
In 2020, the company sold a minority stake in the business to PE fund Kedaara Capital Investment Managers Ltd for Rs. 567.3 crores. With this stake, the company gained a 6.39% stake in the insurer, valuing the health insurer at Rs. 4183 crore. However, this deal of Religare Health Insurance with Kedaara came three years after Religare agreed to sell the health insurance unit to investors driven by the PE firm True North. Still, unfortunately, the deal collapsed for some reason.
One of the spokespersons of the Care Health Insurance said, "The group will use the capital to rejuvenate its other businesses. The roadmap to revive the group has been drawn, and this capital raise will fund some of the cash-strapped businesses of the group."
Last year, the company was looking to raise Rs. 300 crores via the right issue to grow its health insurance business. In an interview, the group executive chairperson, Rashmi Saluja, said, 'We are building a war chest to finance the growth of all subsidiaries, which also includes health insurance. We will raise more funds before the year-end."
Crucial Indications Of Religare's Decision On Its Investors
As Religare gears up to sell its 7% health insurance business, it indicates plenty of things for its investors, which include:
Raise Capital
Capital infusion to raise from investors is one of the reasons Religare's decision indicates. If the company wants to raise funds for business expansion, debt repayment, or other strategic decisions, selling a portion of the stake will give them an instant capital infusion.
Risk Mitigation
By selling its portion of the business, Religare is reducing its ownership in the health insurance business, which also proves to be a risk mitigation strategy for the company. It can diversify its and its investors' portfolios while reducing the focus on a single business segment.
Improved Financial Stability
The decision to sell the company's 7% stake might unlock value for shareholders. Religare has been performing very well since its inception, and selling a portion of its stake allows shareholders to realise the company's value while ensuring financial stability by investing in its unlisted shares.
Future Of Religare Unlisted Shares
Selling a portion of Religare Health Insurance depicts more than just a mere strategic financial decision. It shows an indicator of the company's stability and growth potential as a leading player in the insurance market. As a potential investor, if you want to diversify your investment portfolio, you can buy Religare unlisted shares or invest in other top pre-IPO companies in India with Stockify. We have a team of expert brokers to guide you through the company's details and relevant information to make your trading journey seamless. Also, you will get a high ROI as Religare is expanding its business tremendously. So, speak to experts at Stockify now.
FAQs
Is Religare a good company to invest in?
Ans. Religare Health is a leading health insurance service provider that started its operations in 2012. Since its inception, the company has been growing and offering investors high returns on their investment.
What is the current Religare unlisted share price?
Ans. Religare pre-IPO shares are available at Rs. 188. However, the prices can fluctuate at any time per market conditions and the company's performance.
How much PAT did the company earn during FY 22-23?
Ans. The company's profit after Tax (PAT) was Rs. 245.86 crores compared to FY 21-22, which was Rs. 11.49.
How do I get updates on unlisted shares' prices?
Ans. You can get daily updates on unlisted shares of top pre-IPO companies in India through our platform, Stockify. We regularly update the prices of unlisted shares as per market trends and the company's performance.
What is the important information I should be aware of before investing in Religare unlisted shares?
Ans. EBITDA, EPS Growth, Profit and Loss statement, and Revenue report are crucial details you must know about the company. Expert brokers at Stockify will give you every minute detail about the company to invest in their stocks.
