Finance news
Niva Bupa Health Insurance Company Ltd., formerly Max Bupa Health Insurance Company, is set to make its stock market debut on Thursday, November 14. The IPO received a decent subscription of 1.9 times, but the current grey market premium (GMP) of ₹1 (1.35%) suggests a subdued market sentiment.
Niva Bupa has demonstrated strong growth and a positive turnaround in recent years. However, the recent negative earnings in the first quarter of the current financial year raise concerns about its short-term performance, said Shivani Nyati, Head of Wealth at Swastika Investmart.
Additionally, the IPO’s pricing appears somewhat aggressive, which is expected to impact its listing performance.
“While Niva Bupa’s long-term prospects in the growing Indian health insurance market are promising, investors should exercise caution due to the current market conditions and the company’s recent financial performance,” Nyati said.
Considering all the parameters along with a decent subscription demand. along with the market sentiment, there is a very high possibility of flat listing in the range of +or- 5% over its issue price, said Prashanth Tapse, Sr VP Research – Research Analyst at Mehta Equities.
Tapse said that allotted investors should not expect any big listing gains due to market pressure.
Finance news Niva Bupa IPO details
The company sold its shares in a fixed price band of ₹70-74 apiece for its IPO, which included a fresh issue of equity shares worth ₹800 crore and an offer for sale of up to ₹1,400 crore by promoters. Niva Bupa has reduced the issue size as it was earlier looking to raise ₹3,000 crore.
Under the OFS, Fettle Tone LLP sold shares to the tune of ₹1,050 crore and Bupa Singapore Holdings Pte Ltd offloaded shares valued ₹350 crore.
At present, Bupa Singapore Holdings Pte owns 62.19% stake while Fettle Tone LLP holds 26.8% stake in the insurance company.
Niva Bupa IPO objective
The Gurugram-based health insurance company plans to use the net proceeds from the fresh issuance towards boosting its capital base to strengthen solvency levels and a portion will be used for general corporate purposes.
This will be the second standalone health insurer looking to float an IPO, after Star Health & Allied Insurance Company.
Nuva Bupa is expected to have a post-listing market capitalisation of ₹13,520 crore at the upper end of the price band.
Finance news Company overview
Niva Bupa Health Insurance is one of the country’s largest standalone health insurers (SAHI) based on overall health GDPI (gross direct premium income) of ₹5,494.43 crore in fiscal 2024. Its overall gross written premium (GWP) grew at a CAGR of 41.27% and GWP from retail health grew at a CAGR of 33.41% during FY22-FY24, while its GWP in the quarter ended June 2024 increased by 30.84% over the same period previous fiscal.
The firm had a market share of 17.29% in the Indian SAHI market in the current fiscal 2025, increasing from 16.24% in the previous fiscal 2024, based on retail health GDPI.
On the earnings front, the insurance company has recorded a net profit at ₹81.85 crore in the fiscal 2024, increasing significantly from ₹12.5 crore in the previous fiscal, but the operating profit dropped sharply to ₹188 crore from ₹350.9 crore during the same period.
It has posted a loss of ₹18.8 crore in the three-month period ended June 2024, narrowing from a loss of ₹72.2 crore in the year-ago period, however, its operating profit stood at ₹23.2 crore an against operating loss of ₹13.4 crore in the same period.
ICICI Securities Limited, Morgan Stanley India Company Pvt Ltd, Kotak Mahindra Capital Company Limited, Axis Capital Limited, Hdfc Bank Limited and Motilal Oswal Investment Advisors Limited were the book running lead managers of the Niva Bupa Health Insurance IPO, while Kfin Technologies Limited was the registrar.
