The Insurance Regulatory and Development Authority of India (IRDAI) has granted approval for HDFC Mutual Fund to significantly increase its equity holding in Star Health and Allied Insurance Company. The fund house can now raise its stake to a maximum of 9.99% of Star Health's paid-up share capital.
This regulatory clearance, issued on November 9, 2026, permits HDFC Mutual Fund's various schemes to collectively acquire an additional 5.50 percentage points in the insurer. Prior to this approval, HDFC Mutual Fund held approximately 4.49% of Star Health's equity, amounting to about 2.64 crore shares, as per the shareholding pattern for the quarter ending September 30, 2026.
Details of the Acquisition
Star Health confirmed the IRDAI's decision in a regulatory filing, noting that the approval encompasses both the existing investment and the planned increase. The move signals a strategic deepening of HDFC Mutual Fund's investment in the standalone health insurance provider.
The announcement follows Star Health's recent robust financial performance for the September quarter of FY2026–27. The insurer reported a significant profit after tax of Rs 265 crore, marking a 233% increase compared to approximately Rs 80 crore in the same period last year. Normalised profit after tax also saw a 70% year-on-year rise, reaching Rs 390 crore.
Financial Context and Market Impact
Star Health's underwriting profitability has shown consistent improvement, with the company reporting an underwriting profit of Rs 99 crore for the quarter, a notable turnaround from a Rs 40 crore loss a year prior. This marks the fifth consecutive quarter of enhanced underwriting performance.
Furthermore, the company's gross written premium increased by 19% year-on-year, reaching Rs 5,275 crore during the quarter. This strong financial backdrop likely played a role in HDFC Mutual Fund's decision to seek an increased stake, reinforcing confidence in Star Health's market position and future growth prospects within the competitive insurance sector.