Medi Assist Files for a DRHP – IPO on the Horizon

Introduction

Medi Assist – a company known for the administrative health insurance facilities they provide has just submitted a draft red herring prospectus (or DRHP) with the Securities and Exchange Board of India. This decision to go public was governed by their desire to generate approximately INR 840 crore in the form of an initial public offering (or IPO).

Scope of IPO

The IPO offered by Medi Assist would be made up of an offer for sale (or OFS) segment in addition to a partial exit by Bessemer Ventures and Investcorp. Both of these previously served as private equity investors for the same.

What Does Medi Assist Do?

Third-party administrators (or TPAs) are understood to be firms that help provide processing services in reference to medical insurance claims. Medi Assist has been tethered to a number of insurance companies and helps settle each of their health insurance claims. Those employed by Medi Assist are responsible for supervising and managing documents in addition to processing and carrying forward information to the aforementioned insurance companies such that they can provide their eligible policyholders with settlements.

Facts Discerned from the Report Filed –

India’s most expansive health benefits administrator –

As per details mentioned in this report, Medi Assist presently serves as India’s most expansive health benefits administrator. This is, of course, based on the revenue generated by Medi Assist in addition to the wide range of services provided under a number of health insurance policies. Provided the IPO is made available to the public it would go down in history as India’s first IPO made by an insurance third-party administrator.

Leading the way with profits and EBIDTA –

Medi Assist is ions ahead of its competition in each of these areas. This is owed to the level of commitment it has had on the group as well as retail insurance accounts in comparison to public accounts. Customer satisfaction has been reported to be at an all-time high as well.

Fast Facts about the Company

Thus far Bessemer Ventures has held 45.51% shares while Dr. Vikram Jit Singh Chhatwal has served as the executive chairman & full-time director with 31.63% shares so far. Dr. Chhatwal has been previously tethered to a number of healthcare and financial institutions.

Legal advisory and banking have been provided to Medi Assist by the law firms Shardul Amarchand Mangaldas and Khaitan & Co.

Investment banks that have helped make the IPO a possibility for Medi Assist include Axis Capital, Edelweiss Financial Services, IIFL Capital, and SBI Capital.

Performance Thus Far

In order to grasp the vast breadth of their sales, it is important to familiarize oneself with the extent of the number, or rather – worth, of health insurance premiums managed for a given year. In 2020 for instance, Medi Assist was responsible for health insurance premiums collectively amounting to INR 7829.5 crores.

When set against the private health insurance market, Medi Assist occupies a 29% market share of the same and which is aided by health benefits administrators in India. This percentage was arrived at by considering the premiums under the management of the company for the financial year in question.

There is no doubt thus far of the popularity that Medi Assist presently has in the market. This is evident by the fact that over 60% of their revenue was generated via 7800 corporates spread across a number of varied sectors. As of the fag end of 2020, Medi Assist had 48,892 insurance agents in addition to 106 brokers registered with it.

Conclusion

It would be interesting to see how Medi Assist’s IPO would play out provided it actually becomes available to the market. The Coronavirus pandemic has highlighted the importance of healthcare and the boon that medical insurance companies provide in the form of varied health insurance policies. Claims pertaining to the same have also been higher owing to the fact that more people have needed to cash in on their insurance policies over the past year. Each of these factors is likely to positively contribute to the performance of Medi Assist on the stock market. That being said, investors must always do their due diligence prior to investing their hard-earned funds in the stock market in any capacity.