This unlisted stock is keeping investors in the pink of health amid Covid-19 crisis

The Covid-19 pandemic has burnt a deep hole in the pockets of most health insurers: some Rs 600 crore a month hit on Indian players, and a cumulative $200 billion hit on the industry globally.

Had domestic health insurers been listed on stock exchanges, their stocks would have possibly taken a hard knock. Right? Not quite.

Unlisted shares of a domestic health insurer have been having a dream run in the unlisted market, the unofficial market for trading in such stocks: it has doubled in last six months and trebled in last year and a half.

Unlisted shares of a domestic health insurer have been having a dream run in the unlisted market, the unofficial market for trading in such stocks: it has doubled in last six months and trebled in last year and a half.

The company is Religare Health Insurance, the lone candidate from the sector with no peer in either listed or unlisted space.

State-owned The New India Assurance, which also offers health insurance alongside other general insurance products, is the only comparable player allowing equity investors exposure in the listed space. The stock has surged 50 per cent since the March mayhem, but is down 15 per cent for the calendar.

Looks like investors are betting on an expected spike in demand for insurance products, health insurance in particular, in the wake of the pandemic.

Shares of private life insurers like HDFC Life have surged over 40 per cent from their March lows, while ICICI Prudential Life has gained 60 per cent and SBI Life 80 per cent. However, these stocks are still down 5-11 per cent on a year-to-date basis.

Religare Health Insurance offers products in the retail segment for critical illness, personal accident, top-up coverage, international travel insurance and maternity covers along with group health insurance and group personal accident insurance for corporates.

Dealers of the unlisted market said the stock, which debuted at Rs 25-27 in early 2019, was trading at Rs 35-40 at the start of 2020 but has since risen to Rs 70-75. And the performance is still improving.

In FY18, the company posted a topline of Rs 782.85 crore and generated Rs 20.85 crore PAT. In FY19, it managed Rs 1,222.5 crore revenue and Rs 61.34 crore PAT.

“It’s important to have health insurance in one’s portfolio and the way the sector is going to evolve makes it an investment opportunity,” says Abhinav Angirish, Founder of

Industry watchers are positive on the company, as health insurance has suddenly become the talk of the town.

There are also other reasons to cheer Religare Health Insurance. “The stake acquisition in the health insurer by a private equity player, surge in health insurance demand and approval of short term health insurance policies by insurance regulator IRDAI are big positives for the company,” said Jasbir Singh of Meera Associates, a Pune-based firm that deals in unlisted shares.

IRDAI has allowed life, general and health insurers to offer coronavirus-specific short-term health insurance policies for periods ranging from 3 to 11 months in both individual and group categories.

Homegrown private equity fund Kedaara, through group entity Trishikur Ventures, acquired more than 72 per cent stake in the health insurer last month for Rs 567.31 crore, which comprised primary capital infusion of Rs 300 crore.

Singh of Meera Associates sees at least 20 per cent upside in the stock in unlisted market in the near term. It is the only health insurance stock being traded off market.

Abhishek Chaturvedi of Ultimate Wealthowl, another dealer in unlisted shares, said personal health insurance has become a primary need now. “People are buying it and those who already have it are rushing for top up,” he said. He expects Religare Health stock price to double in 18 months.

In the secondary market, many analysts are betting on the insurance sector as possible driver of the next bull run.

Kotak Institutional Equities in a recent report said standalone health insurers should fare well going forward. “Domestic health insurers reported strong 17 per cent year-on-year growth in retail health in April 2020 (higher than 12% YoY in FY2020). Investment by health insurers in digital renewal of policies has likely paid off,” it said.

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