Niva Bupa Health Insurance’s recent ₹2,200 crore IPO has sparked significant interest among investors. With a strong first-day subscription of 65%, the market is buzzing with anticipation. Let’s look deeper into the details of this IPO and explore what it offers to potential investors.
The Niva Bupa Health Insurance IPO, launched on November 7, 2024, is open for subscription until November 11, 2024. This IPO, structured as a book-built issue, aims to raise ₹2,200 crores by combining a fresh issue and an offer for sale (OFS) component. Specifically, the fresh issue consists of 10.81 crore shares valued at ₹800 crores, while the OFS includes 18.92 crore shares amounting to ₹1,400 crores.
Investors must apply for a minimum lot size of 200 shares, translating to a minimum retail investment of ₹14,800. Meanwhile, the minimum investment required for small non-institutional investors (sNII) is set at ₹207,200 for 2,800 shares, and for big non-institutional investors (bNII), the minimum is ₹1,006,400 for 13,600 shares.
After the allocation, which is expected to be finalized by November 12, 2024, Niva Bupa’s shares are slated to list on both the BSE and NSE on November 14, 2024.
Source: SEBI
Niva Bupa Health Insurance IPO
| Offer Price | ₹70 to ₹74 per share |
| Face Value | ₹10 per share |
| Opening Date | 7 November 2024 |
| Closing Date | 11 November 2024 |
| Total Issue Size (in Shares) | 297,297,297 |
| Total Issue Size (in ₹) | ₹2,200 Cr |
| Issue Type | Book Built Issue IPO |
| Lot Size | 200 Shares |
| Listing at | BSE, NSE |
Subscription Status of Niva Bupa
The Niva Bupa Health Insurance IPO attracted solid attention on its opening day, achieving a 65% subscription. Investors bid for 11.19 crore shares against the 17.28 crore shares available. Here’s how the different investor categories contributed on Day 1:
| Qualified Institutional Buyers (QIBs) | Subscribed at 79% |
| Non-Institutional Investors (HNIs) | Subscribed at 33% |
| Retail Investors | Subscribed at 71% |
Objectives of the IPO
The company aims to allocate the IPO proceeds to achieve two primary objectives:
- Augmentation of Capital Base: To strengthen the company’s solvency levels, supporting its financial stability and long-term growth.
- General Corporate Purposes: Funds may also be used for other corporate needs as determined by management.
Grey Market Premium (GMP)
The GMP for Niva Bupa Health Insurance IPO is currently ₹0 (as of November 8, 2024). With the price cap at ₹74, the estimated listing price is also expected to be around ₹74, indicating no anticipated premium or discount. This stable GMP suggests market confidence in the company’s valuation, though the premium could change in the days leading to listing based on demand. Source: Livemint
Company Overview
Founded in 2008, Niva Bupa Health Insurance is a joint venture between Bupa Group and Fettle Tone LLP, established to serve the health insurance needs of individuals and families across India. With a strong focus on technology and customer service, the company’s key offerings include:
- Retail Health Products: Tailored for individuals and families.
- Group Health Products: Designed for corporate clients.
As of March 31, 2024, the company served 14.73 million active insured lives and operated in 22 states and four union territories. Recent initiatives, including a mobile application and website, emphasize digital tools for customer convenience.
Financial Strength
Niva Bupa Health Insurance has demonstrated consistent financial growth in recent years, supported by increasing demand within India’s health insurance sector. Between the fiscal years ending March 31, 2023, and March 31, 2024, the company’s revenue surged by 44.05%, and its profit after tax (PAT) grew substantially by 552.73%.
This growth reflects Niva Bupa’s strategic expansion and operational improvements, including a focus on retail and group health products. Gross written premiums (GWP), a key measure of growth in the insurance industry, also expanded significantly, growing at a compound annual growth rate (CAGR) of 41.27% from fiscal years 2022 to 2024. Retail health premiums alone recorded a CAGR of 33.41%, underscoring the company’s increasing foothold in the individual and family health insurance markets. Source: SEBI
SWOT Analysis of Niva Bupa
| STRENGTHS | WEAKNESSES |
| Diverse Product Portfolio: A broad range of products catering to individual and group health insurance needs. Strong Digital and Automated Systems: Uses AI-driven technology, including machine learning lead scoring, CRM, and telemarketing tools, to enhance customer engagement and service efficiency. Trusted Brand Parentage: Bupa Group’s established reputation in healthcare and health insurance lends credibility to Niva Bupa. Experienced Claims Management: The company brings expertise in handling claims and managing provider relationships, which are critical in health insurance. | Heavy Dependence on Technology: While advantageous, high reliance on digital tools can lead to operational vulnerabilities, particularly in data security and technical issues. Relatively Young in Market Tenure: Compared to some competitors, Niva Bupa is a younger player, which could impact brand loyalty and customer acquisition in some segments. |
| OPPORTUNITIES | THREATS |
| Increasing Demand for Health Insurance: Rising healthcare costs and awareness about health insurance in India present an expanding market opportunity. Potential to Penetrate Untapped Markets: With a presence in 22 states and four union territories, Niva Bupa can still expand to other regions within India. Innovation in HealthTech: There is scope to leverage AI, mobile apps, and digital platforms further for personalized health solutions, which could lead to increased customer retention. | High Competition in Health Insurance: The Indian health insurance market is competitive, with established players and new entrants vying for market share. Regulatory Changes: Any changes in health insurance regulations could impact pricing, operational costs, and growth. Economic Downturn: Customers may prioritize essential expenditures during financial slowdowns, impacting premium collection and profitability. |
Conclusion
With good financial performance, a diversified product portfolio, and a promising Day 1 subscription, Niva Bupa Health Insurance’s IPO has garnered investors’ attention. The absence of a Grey Market Premium may suggest a stable listing, which investors will closely watch in the coming days.
Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.
I’m Archana R. Chettiar, an experienced content creator with
an affinity for writing on personal finance and other financial content. I
love to write on equity investing, retirement, managing money, and more.
