The initial public offering (IPO) of Niva Bupa Health Insurance Company opens for bidding on Thursday, November 7. Investors can bid for the issue in the fixed price band of Rs 70-74 apiece for a minimum of 200 equity shares and its multiples thereafter. The IPO can be subscribed until Monday, November 11.
Incorporated in 2008, Niva Bupa Health Insurance Company is a joint venture between the Bupa Group and Fettle Tone LLP that provides insurance in the health sector. It offers a holistic proposition by providing customers access to a comprehensive health ecosystem and service capabilities through its Niva Bupa Health mobile application and website.
The Rs 2,200 crore IPO of Niva Bupa Health Insurance includes a fresh share sale of Rs 800 crore and an offer-for-sale (OFS) of up to Rs 1,400 crore by its promoter entities- Bupa Singapore Holdings and Fettle Tone LLP. Net proceeds from the issue shall be utilized towards augmentation of its capital base to strengthen solvency levels.
Niva Bupa Health raised Rs 990 crore via anchor book as it allocated 13,37,83,783 equity shares at Rs 74 apiece. Global investors including Morgan Stanley, Fidelity, Government Pension Fund Global, Templeton Emerging Markets Investment Trust, First Sentier Investors International, The Scottish Oriental Smaller Companies and others participated in the anchor book.
Gurugram-based Niva Bupa Health Insurance Company had 14.73 million active lives insured as of March 31 2024. The company is present across 22 states and four union territories in India as of the given date. The overall GWP grew at a CAGR of 41.27 per cent, while GWP from retail health increased by 33.41 per cent from FY22 to FY24.
Niva Bupa Health Insurance Company reported a net loss of Rs 18.82 crore with a revenue of Rs 1,124.90 crore for the quarter ended on June 30. The company clocked a net profit of Rs 81.85 crore with a revenue of Rs 4,118.63 crore for the financial year ended on March 31, 2024. The company will command a total market capitalization of Rs 13,380 crore.
Niva Bupa Health Insurance Company has reserved 75 per cent of the net for the qualified institutional bidders (QIBs), while non-institutional investors (NIIs) will get 15 per cent of the offer. Remaining 10 per cent of the net offer shall be allocated towards the retail investors. ICICI Securities, Morgan Stanley India, Kotak Mahindra Capital, Axis Capital, HDFC Bank and Motilal Oswal Investment Advisors are the book running lead managers of the Niva Bupa Health Insurance IPO, while Kfin Technologies is the registrar for the issue. Here's what brokerage firms said about the IPO of Niva Bupa Health Insurance:
Anand Rathi Research Rating: Subscribe for long-term Niva Bupa Health Insurance is a prominent health insurance provider in India. They offer a diverse range of products for customers, strengthened by a strong track record in product innovation. Their health insurance offerings are designed to meet the needs of customers at every stage of life, said Anand Rathi Research.
"The company aims to build a comprehensive, customer-focused health insurance platform and healthcare ecosystem, offering customers access to a variety of services, including wellness programs, doctor consultations, diagnostics, and medicine delivery. The company is valued at P/BV of 6.1 times. We believe that the issue is fully priced and recommend 'subscribe for long term," it said.
Arihant Capital Market Rating: Subscribe for long term Niva Bupa Health Insurance has positioned itself as India’s third largest and second fastest-growing standalone health insurer, achieving robust GWP growth The company focuses on high-LTV retail health products with an increasing average ticket size and significant expansion in active lives insured, said Arihant Capital Markets.
Strategic expansion across India and digital channel growth, supported by the e-agency model, further strengthen its retail health market reach. At the upper band of Rs 74, the issue is valued at a PBV ratio of 6.1 times based on a FY24 BV of Rs 12.06 We are recommending a 'subscribe for long term' for this issue," it said.
Swastika Investmart Rating: Subscribe with caution Niva Bupa Health Insurance is a leading player in India’s health insurance market. Among the fastest-growing companies in the sector. The company posted a positive turnaround in FY23, though recent earnings in the first quarter of the current fiscal are in the negative. IPO pricing appears somewhat aggressive, said Swastika Investmart, with high risk investors to subscribe for the issue.
Canara Bank Securities Rating: Subscribe for long term Gross written premium (GWP) has grown at a CAGR of 78.8 per cent to Rs 5,607.57 crore in FY24. It has achieved a significant turnaround in net profit, growing at a CAGR of 154.3 per cent, from a net loss of Rs 196.53 crore in FY22 to a net profit of Rs 81.85 crore in FY24, said Canara Bank Securities.
"Niva Bupa is a fast-growing health insurer in India, with innovative products, strong market presence, and a solid customer centric approach. However, the aggressive valuation, coupled with the company’s loss-making status in Q1FY25, suggests that the IPO may be suited for investors with a high-risk appetite," it added with a 'subscribe' for long term rating.
StoxBox Rating: Subscribe with long term Niva Bupa Health Insurance's financial performance is likely to be driven by product innovation, investment in technology and analytics to facilitate the sales and servicing of products and further expand presence in existing geographies within India, investment in deepening distribution channels and increase market share in retail health insurance, said StoxBox.
"Given its leading health insurance company, innovative expansion plans, technology-led automated approach and potential for profitability, we recommend a 'subscribe' rating for the issue with a medium to long-term investment perspective," it added.
Mehta Equities Rating: Subscribe for long term Mehta Equities believes Niva Bupa Health Insurance IPO brings investors an opportunity to invest in one of India's fastest-growing standalone health insurers with a robust product portfolio, strategic innovation and digital advancements. It has managed to increase the average ticket size and improve its claims ratio, demonstrating operational efficiency, said Mehta Equities.
"With a CAGR of 41.27 per cent in GWP from FY22-24, Niva Bupa is strategically positioned to capitalize on India's growing health insurance market. Hence, by looking at all the attributes we recommend investors to 'subscribe' the Niva Bupa Health Insurance Company IPO for long term perspective only," it said.
Bajaj Broking Rating: Subscribe for long term Niva Bupa Health Insurance is a leading health insurance company in India, dedicated to giving every Indian the confidence to access the best healthcare. The company aims to achieve this through a range of health insurance products and services that help customers navigate their healthcare journey, providing access to a comprehensive health ecosystem, said Bajaj Broking.
"If we annualize FY25 earnings to the post-IPO fully diluted equity base, the asking price results in a negative price-to-earnings (P/E) ratio. Based on FY24 earnings, the P/E ratio stands at 642.22. Consequently, the issue appears to be aggressively priced," it said with a subscribe for long-term rating.