Niva Bupa Healthcare's initial public offering (IPO) opened for subscription today. The issue, which includes a fresh equity sale of Rs 800 crore and an offer for sale (OFS) of Rs 1.89 crore shares, will be up to bidding till November 11.

The company intends to use the net proceeds from the new issue to increase its capital base, reinforce solvency levels, and for general corporate reasons.

Niva Bupa Healthcare IPO price range

The company has set a price band of Rs 70-74 per share, allowing investors to bid for 200 shares in one lot.

Niva Bupa Healthcare's IPO GMP

Prior to the commencement of the issue, the company's shares were trading in the unlisted market with a GMP of Rs 0.

Preview of Niva Bupa Healthcare's IPO

Despite the IPO's aggressive pricing, analysts encouraged investors to subscribe for it from a long-term standpoint.

"Niva Bupa is a major force in the health insurance industry in India. It is one of the industries' fastest-growing businesses. Despite recent earnings in the first quarter of the current fiscal year being negative, the company reported a positive reversal in FY23. Only high-risk investors who are thinking about applying should do so", according to Swastika Investmart.

With a market valuation of Rs 13520 crore following the issuance of equity shares, the company is valued at 6.1X P/BV at the higher price range. We think the issue is fully priced, and we advise the IPO to receive a Subscribe-Long Term rating", Anand Rathi stated.

Additional Information

After Star Health & Allied Insurance Company, Niva Bupa is the second independent health insurer (SAHI) to target the Indian stock exchanges through an initial public offering (IPO).

Based on an overall Health GDPI of Rs 5,494 crore in fiscal 2024, which increased at a CAGR of 41.37% from FY 2022 to 2024, it is the third largest and second fastest growing SAHI in India. In fiscal 2024, it boasted a Gross Direct Written Premium (GDPI) of Rs 5,499.43 crore.

During  between FY22 and FY24, the company's total health GDPI grew by 41.37%, which is among the highest among SAHIs and almost twice as fast as the industry average of 21.42%.

As of March 2024, Niva Bupa had 210 physical branches and 143,074 agents spread across 22 Indian states and 4 union territories. According to the Redseer Report, it distributes its goods through 64 banks and other business agents, including well-known organizations like HDFC Bank and Axis Bank.

KFin Technologies is the offer's registrant, while ICICI Securities, Morgan Stanley India, Kotak Mahindra Capital, Axis Capital, HDFC Bank, and Motilal Oswal Investment Advisors are the book-running lead managers.