MUMBAI: Shares of Star Health and Allied Insurance Co were volatile in the first major listing since Paytm’s debut last month as investors gauge enthusiasm for richly valued stocks that offer poor prospects for near-term profitability.

       The company’s shares fluctuated after falling as much as 8% below initial public offering price (IPO) of 900 rupees (RM50.20) but soon recovered losses to trade little changed at 905 rupees (RM50.50) during the morning trade session.

       The issue price was seen as fully priced by some investors as Star Health swung to a loss in the year ended March 2021.

       The pandemic has boosted insurance claims and Amarjeet Maurya, an analyst at Angel One Ltd, said Omicron may extend the company’s losses into the year through March 2023. “I am not too sure how much profit a pure health insurance company can make,” said Deven Choksey, a strategist at KRChoksey Investment Managers.

       He said the companies’ premiums are rising given that health insurance is more of a protection product, but at the same time, their claim ratios are also increasing.

       Investors are turning increasingly sceptical about IPOs as a record year for Indian listings draws to a close. — Bloomberg