Niva Bupa Ltd IPO: Review, Expert Analysis, and Investment Recommendations
Niva Bupa Health Insurance is set to launch its IPO with total issue size of ₹ 2200 crore, which comprises fresh issue of ₹800 crore and offer for sale of ₹1400 core.
IPO Subscription Period
- Open Date: November 7, 2024
- Close Date: November 11, 2024
- Allotment Date: November 12, 2024
- Listing Date: November 14, 2024
- Stock Exchanges: BSE and NSE
Pricing Details
- Price Band: ₹70 – ₹74 per Share
- Face Value: ₹10 per Share
- Minimum Lot Size: 200 shares
- Investment Requirement:
- Retail Investors: Minimum ₹14,800 (200 shares)
- Small Non-Institutional Investors (sNII): 14 lots (2800 shares) – ₹207,200
- Big Non-Institutional Investors (bNII): 68 lots (13,600 shares) – ₹1,006,400
Reservation Structure
- Qualified Institutional Buyers (QIB): 30% (8,91,89,190 shares)
- Non-Institutional Investors (NII): 15% (4,45,94,595 shares)
- Big NII (bNII): 10%
- Small NII (sNII): 5%
- Retail Investors: 10% (2,97,29,730 shares)
- Anchor Investors: 45% (13,37,83,783 shares) raising ₹8,315.28 crores
Key Dates and Timeline
- IPO Open Date: Thursday, November 7, 2024
- IPO Close Date: Monday, November 11, 2024
- Basis of Allotment: Tuesday, November 12, 2024
- Initiation of Refunds: Wednesday, November 13, 2024
- Credit of Shares to Demat: Wednesday, November 13, 2024
- Listing Date: Thursday, November 14, 2024
- Cut-off time for UPI mandate confirmation: 5 PM on November 11, 2024
Book Running Lead Managers
Niva Bupa Health Insurance Limited has appointed prominent financial institutions as book-running lead managers for the IPO:
- ICICI Securities Limited
- Morgan Stanley India Company Private Limited
- Kotak Mahindra Capital Company Limited
- Axis Capital Limited
- HDFC Bank Limited
- Motilal Oswal Investment Advisors Limited
Kfin Technologies Limited has been designated as the registrar for the IPO.
Promoter Information
- Promoter: Bupa Singapore Holdings Pte Ltd and Bupa Investments Overseas Limited.
- Shareholding:
- Pre-Issue: 62.27%
- Post-Issue: 56%
About Niva Bupa Health Insurance Limited
Incorporated in 2008, Niva Bupa Health Insurance Company Limited is a joint venture between the Bupa Group and Fettle Tone LLP that provides insurance in the health sector.
Niva Bupa offers a variety of health insurance policies catering to individuals and families, covering hospitalization, pre- and post-hospitalization expenses, and additional benefits like annual health check-ups, daycare treatments, and ambulance services.
Popular plans include Health Companion, ReAssure, and GoActive, which provide customizable options to meet diverse healthcare needs. The company’s products are broadly categorized into
- Retail products designed for individuals and families.
- Group products intended for employers and employees.
As of March 31 2024, the 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.
Financial Highlights
- Revenue Growth: Decreased by 21% from ₹413.07 crores (FY 2023) to ₹328.71 crores (FY 2024)
- Profit After Tax (PAT): Rose by 650%, reaching ₹81.85 crores in FY 2024
- Net Worth: ₹2049.6 crores
- Total Borrowing: ₹250 crores
Key Performance Indicators (KPIs):
- ROCE: 13.69%
- RoNW: 5.68%
- P/BV: 6.14
- EPS (Pre-IPO): ₹0.48
- EPS (Post-IPO): ₹-0.42
- P/E Ratio (Pre-IPO): 153.7x
- P/E Ratio (Post-IPO): -177.74x
IPO Objectives
The company proposes to utilise the Net Proceeds towards the following objects:
- Augmentation of its capital base to strengthen solvency levels and
- General corporate purposes
Subscription Status (As of November 8, 2024, 7:02:07 PM)
- Retail: 0.76x
- QIB: 0.83x
- NII: 0.35x
- Overall Subscription: 0.69x
Total Applications Received: 20,51,35,135 shares for 29,72,97,298 shares bid.
Recommendation
Apply (for Long-term investment) Niva Bupa Health Insurance Ltd. stands as one of the larger players in India’s health insurance sector, boasting strong financial performance and a well-diversified portfolio. However, the high Price-to-Earnings (PE) ratio indicates overvaluation, which could limit immediate upside. For those considering applying, tepid investor sentiment around the IPO suggests a relatively lower likelihood of strong listing-day gains. Long-term investors, however, may find potential in adding this stock to their portfolios, given the sector’s growth trajectory and Niva Bupa’s established market position.