Niva Bupa Health Insurance Rs 2,200 Cr IPO Opens Today

Niva Bupa Health Insurance Company has raised Rs 990 crore from anchor investors ahead of its IPO subscription, which opens for bidding today. Formerly known as Max Bupa Health Insurance, the private insurer’s IPO will be available for three-day subscription, starting Thursday, 7 November, and closing on Monday, 11 November 2024.

The Delhi-based health insurer allocated 13,37,83,783 equity shares at Rs 74 per share to anchor investors, amounting to a transaction size of Rs 990 crore. Prominent participants in this round included Amansha Holdings, Zulia Investments, Nippon Life, Tata Balance, Axis Mutual Fund, and Morgan Stanley Investment Fund, among others. Six domestic mutual funds were among the 32 anchor investors.

The offering consists of a fresh issue of Rs 800 crore and an Offer-for-Sale (OFS) of Rs 1,400 crore. The primary objective is to strengthen the insurer’s capital base to bolster solvency levels, with a portion of funds earmarked for general corporate purposes.

Niva Bupa IPO Details

Niva Bupa Health Insurance IPO is a book-built issue worth Rs 2,200 crore. This includes a fresh issue of 10.81 crore shares aggregating to Rs 800 Crore and an OFS of 18.92 crore shares valued at Rs 1,400 crore. The IPO price band is set between Rs 70 and Rs 74 per share.

The IPO will close on 11 November 2024, with allotment expected on 12 November 2024. The listing is tentatively scheduled for Thursday, 14 November, on the BSE and NSE. The minimum lot size for retail investors is 200 shares. ICICI Securities, Morgan Stanley India Company, Kotak Mahindra Capital Company, Axis Capital, HDFC Bank, and Motilal Oswal Investment Advisors are the book-running lead managers, while KFin Technologies serves as the registrar.

Under the OFS, Fettle Tone LLP will sell shares valued at Rs 1,050 Crore, while Bupa Singapore Holdings Pte Ltd will offload Rs 350 crore worth of shares. Currently, Bupa Singapore Holdings Pte owns a 62.19 per cent stake, and Fettle Tone LLP holds 26.8 per cent in the company. The two promoters will reduce their stake as Niva Bupa lists on Dalal Street.

Seventy-five per cent of the IPO size is reserved for qualified institutional buyers, 15 per cent for non-institutional buyers, and the remaining 10 per cent for retail investors.

Financial Highlights

Niva Bupa Health Insurance reported strong growth, with revenue rising 44 per cent year-on-year in FY24. The Gross Written Premium (GWP) increased by 37.7 per cent to Rs 5,607 crore in FY24 from Rs 4,073 crore in FY23. In Q1 FY25, the company posted a loss of Rs 18.8 Crore, an improvement from a Rs 72.2 Crore loss in the same period last year, as the health insurance sector generally has a long gestation period.

By Q1 FY25, Niva Bupa’s retail health market share reached 9.9 per cent, up from 7 per cent in FY22, outperforming industry peers. Its total market share stands at 5.1 per cent.