The health insurance sector in India is booming, and Niva Bupa Health Insurance Company is one of the leading players in this rapidly expanding industry. With its IPO launching in November 2024, investors have a significant opportunity to get involved in a company with a promising future. But the crucial question remains: Should you apply for the Niva Bupa Health Insurance IPO or avoid it?
In this review, we’ll dive deep into the details of the Niva Bupa Health Insurance IPO, assess its potential, and provide you with insights into whether it’s a good investment choice.
Niva Bupa Health Insurance IPO Overview
Niva Bupa Health Insurance is offering an IPO worth ₹2,200 crore, combining a fresh issue of ₹800 crore and an offer for sale (OFS) of ₹1,400 crore. The IPO opens for subscription on November 7, 2024, and will close on November 11, 2024. The tentative listing date is set for November 14, 2024 on the BSE and NSE.
Key IPO Details:
- IPO Issue Size: ₹2,200 crore
- Fresh Issue: ₹800 crore
- Offer for Sale: ₹1,400 crore
- Price Band: ₹70 to ₹74 per share
- Minimum Lot Size: 200 shares (₹14,800)
- Listing Date: November 14, 2024
- Promoters: Bupa Singapore Holdings Pte. Ltd & Fettle Tone LLP
The company is offering equity shares with a face value of ₹10 per share.
Niva Bupa Health Insurance IPO Key Details
| Detail | Value |
|---|---|
| IPO Date | November 7-11, 2024 |
| Price Band | ₹70 to ₹74 per share |
| Issue Size | ₹2,200 crore |
| Fresh Issue | ₹800 crore |
| Offer for Sale | ₹1,400 crore |
| Lot Size | 200 shares |
| Listing Date | November 14, 2024 |
| BSE/NSE Listing | Yes |
Niva Bupa Health Insurance IPO Price and Allotment
The price band for the Niva Bupa Health Insurance IPO is set between ₹70 to ₹74 per share, which is considered attractive compared to its growth prospects and market conditions. Retail investors can apply for a minimum of 200 shares, with a total investment of ₹14,800. For qualified institutional buyers (QIBs), the lot size is much larger, starting at 14 lots (2,800 shares), which amounts to ₹207,200.
The allotment process for the IPO will be finalized on November 12, 2024, and the shares are expected to be credited to Demat accounts by November 13, 2024.
Niva Bupa Health Insurance IPO Lot Size and Investment
| Investor Category | Shares | Amount |
|---|---|---|
| Retail (Min) | 200 shares | ₹14,800 |
| Retail (Max) | 2,600 shares | ₹192,400 |
| S-HNI (Min) | 2,800 shares | ₹207,200 |
| B-HNI (Min) | 13,600 shares | ₹1,006,400 |
Niva Bupa Health Insurance IPO Subscription Status and Allotment
Investors will be keenly watching the subscription status of the IPO to gauge market demand. The Niva Bupa Health Insurance IPO will likely attract strong interest, given the company’s position in the health insurance sector and its track record of growth. As the company is aiming to expand its capital base, institutional investors and high-net-worth individuals (HNIs) will play a major role in driving the demand for shares.
Niva Bupa has allocated:
- 75% of the shares for QIBs (Qualified Institutional Buyers)
- 10% for retail investors
- 15% for non-institutional investors (NII/HNI)
The allotment process will depend on the subscription rates and will be announced shortly after the IPO closes.
Niva Bupa Health Insurance IPO Listing and Shareholder Quota
The listing date for the Niva Bupa Health Insurance IPO is scheduled for November 14, 2024. On this date, the shares will begin trading on both the BSE and NSE.
As per the shareholder quota, retail investors have a 10% allocation, which ensures that smaller investors have an opportunity to participate in this promising IPO. The Pre-IPO stock was priced between ₹67.15 and ₹85 per share, which provides a good indication of the pricing range.
Niva Bupa Health Insurance Company Overview
Founded in 2008, Niva Bupa Health Insurance is a joint venture between the Bupa Group and Fettle Tone LLP. With a presence across 22 states and four union territories in India, the company offers health insurance products tailored to both individual and group customers.
As of March 2024, the company has insured over 14.73 million active lives and continues to grow rapidly. The company’s product portfolio includes:
- Retail health insurance for individuals and familie
- Group health insurance for businesses
Niva Bupa has demonstrated strong growth, with a CAGR of 41.27% in gross written premiums (GWP) from FY 2022 to FY 2024. Their focus on digital platforms, including the Niva Bupa Health app, has contributed significantly to customer engagement and policy sales.
Financial Performance
Niva Bupa’s financials show solid revenue growth and significant improvement in profits. From FY 2023 to FY 2024, the company’s revenue increased by 44.05%, and its Profit After Tax (PAT) surged by an impressive 552.73%. This upward trajectory is a strong indicator of the company’s potential for long-term growth.
Here’s a look at some key figures:
Table 3: Niva Bupa Health Insurance Financial Highlights
| Metric | 30 Jun 2024 | 31 Mar 2024 | 31 Mar 2023 | 31 Mar 2022 |
|---|---|---|---|---|
| Assets | ₹6,542.06 cr | ₹6,191.87 cr | ₹3,876.57 cr | ₹2,738.44 cr |
| Revenue | ₹1,124.90 cr | ₹4,118.63 cr | ₹2,859.24 cr | ₹1,884.54 cr |
| Profit After Tax | ₹-18.82 cr | ₹81.85 cr | ₹12.54 cr | ₹-196.53 cr |
| Net Worth | ₹2,031.77 cr | ₹2,049.59 cr | ₹831.12 cr | ₹507.65 cr |
Should You Apply for the Niva Bupa Health Insurance IPO?
Considering the company’s strong growth trajectory, impressive product portfolio, and solid financials, the Niva Bupa Health Insurance IPO is an attractive option for medium to long-term investors. The IPO price band of ₹70 to ₹74 per share appears to be reasonable, especially given the company’s internal share placement between ₹67.15 and ₹85 per share.
The health insurance sector in India has significant growth potential, and Niva Bupa is well-positioned to capitalize on this. If you are a well-informed investor with a medium-to-long-term perspective, applying for the Niva Bupa Health Insurance IPO could be a smart move.
Final Thoughts
In conclusion, while the Niva Bupa Health Insurance IPO may appear aggressively priced in the short term, it is backed by solid growth and promising fundamentals. Given the company’s financial performance and market positioning, we recommend considering this IPO for the medium to long term.
As with any investment, always perform due diligence and consult with a financial advisor before making a final decision.
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