RETAIL FUNDS | Cesar Tordesillas, India

Tata Capital buys stake in Star Health

Tata Capital Growth Fund has invested Rs 120 crore ($23 million) for a 14 percent in Star Health.

The company that already has ICICI Venture and Sequoia Capital among its investors. While the former had invested Rs 130 crore for a 24 percent stake, Sequoia had pumped in around Rs 140 crore in Star Health Investments - a special purpose vehicle floated to promote Star Health Insurance - for around 40 per cent.

Star Health & Allied Insurance Company is India's first standalone health insurance company.

"The health insurance sector is poised for robust growth due to favourable demographics and significant growth in discretionary income," said Akhil Awasthi, managing partner, Tata Capital Growth Fund. Awasthi will also join the company's board. 

Star Health's fund-raising plan has also received significant interest from several private equity players like PremjiInvest and Aditya Birla Private Equity. 

It is managed by a former CMD of public sector general insurance company United India Insurance and has a capital base of around Rs 440 crore with a paid-up capital of around Rs 280 crore. 

In between FY08 to FY12, its gross premium income grew at a CAGR of 61 per cent, but in recent times there has been some contraction.

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