Health Insurer Niva Bupa Files for Rs 3,000 Crore IPO

Niva Bupa Health Insurance Company Ltd, backed by True North, has submitted a draft red herring prospectus to the Securities Exchange Board of India (SEBI) to raise Rs 3,000 crore through an initial public offering (IPO).

The IPO will include a fresh issue of shares worth Rs 800 crore and an offer for sale (OFS) of up to Rs 2,200 crore by the company’s current shareholders and promoters. The majority owner of the company is the British United Provident Fund (Bupa).

The OFS will see Bupa Singapore Holdings Pte selling shares worth up to Rs 320 crore and Fettle Tone LLP selling shares worth up to Rs 1,880 crore. Currently, Bupa Singapore Holdings holds a 62.27 percent stake in the company, while Fettle Tone LLP holds a 27.86 percent stake.

The lead managers for the IPO are ICICI Securities, Morgan Stanley India, Kotak Investment Capital, Axis Capital, and HDFC Bank.

The company plans to use Rs 625 crore from the fresh issue to boost its capital base and improve solvency levels.

Niva Bupa aims to become India’s top health insurance platform, offering a comprehensive ecosystem through its ‘NivaBupa Health’ app and website.

As of March 31, 2024, the company had 14.73 million active insured lives. Its gross written premium (GWP) increased to Rs 5,607.57 crore from Rs 4,073.03 crore the previous year, growing at a compound annual growth rate (CAGR) of 41.27% from Fiscal 2022 to 2024. The company’s combined ratios also improved annually: 98.76% in 2024, 97.13% in 2023, and 107.41% in 2022. The network of hospitals expanded to 10,460 by March 31, 2024, up from 8,562 as of March 31, 2022.

For the fiscal year 2024, the premium earned was Rs 3,811.25 crore, compared to Rs 2,662.75 crore the previous year. The total income for the fiscal year was Rs 4,118.63 crore, up from Rs 2,859.24 crore the previous year. The net profit for the year was Rs 81.85 crore, compared to Rs 1.25 crore the previous year.

The company incurred claims worth Rs 2,249.54 crore in FY24, up from Rs 1,439.31 crore the previous year. The claims ratio increased to 59.02 percent from 54.05 percent the previous year.

This year, over 100 companies have raised around $4 billion through public issues, more than double the amount raised by June last year, according to data from LSEG quoted by Reuters.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to consult certified experts before making any investment decisions.