Mon Nov 11 08:03:47 UTC 2024: ## Niva Bupa Health Insurance IPO Oversubscribed, Expected to List on November 14th

**Gurugram, India – November 10, 2023** – The initial public offering (IPO) of Niva Bupa Health Insurance Company Ltd, formerly Max Bupa Health Insurance Company, is set to close today, garnering significant investor interest. As of Monday morning, the IPO received 1.25 times subscription, with bids for 21,54,61,200 shares against the 17,28,57,143 shares offered.

The Qualified Institutional Buyers (QIBs) portion saw 1.5 times subscription, while Retail Individual Investors (RIIs) showed strong interest with 1.68 times subscription. However, the Non-Institutional Investors part saw a lower subscription rate of 0.44 times.

The IPO, priced between Rs 70-74 per share, was opened on November 7. Allotment is expected to be finalized on November 12, with the shares likely to be listed on November 14.

**Grey Market Premium Indicates Strong Listing Expectations**

According to market observers, unlisted shares of Niva Bupa Health Insurance Ltd are trading at a Rs 3 premium in the grey market, exceeding the issue price. This grey market premium (GMP) translates to an anticipated 4.05 per cent listing gain. While the GMP is based on market sentiment and can fluctuate, it suggests strong investor interest and potential for listing gains.

**IPO Details and Promoters’ Stake**

The Rs 2,200 crore IPO comprises a fresh issuance of Rs 800 crore worth of equity shares and an offer-for-sale of Rs 1,400 crore worth of shares by promoters. Promoters Bupa Singapore Holdings Pte and True North-owned Fettle Tone LLP will be selling Rs 350 crore and Rs 1,050 crore worth of shares respectively.

Promoters currently hold an 89.07 per cent stake in the company, with Bupa Singapore Holdings Pte holding 62.19 per cent and Fettle Tone LLP holding 26.80 per cent.

**Strong Financial Performance and Market Position**

Niva Bupa Health Insurance, based in Gurugram, is a leading private health insurer in India. The company holds a 17.29 per cent market share in the Indian Standalone Health Insurance (SAHI) market, up from 16.24 per cent in the previous fiscal. Niva Bupa is the third-largest standalone health insurer and the second-fastest growing in the country, with a Gross Direct Premium Income (GDPI) of Rs 5,494 crore for fiscal 2024.

The company’s financial performance has been strong, with a net profit of Rs 81.85 crore in FY 2023-24, a significant jump from Rs 12.5 crore in the previous fiscal. However, operating profit declined from Rs 350.9 crore to Rs 188 crore during the same period.

**Peer Comparison and Lead Managers**

Niva Bupa faces competition from other health insurance companies such as Star Health & Allied Insurance, ICICI Lombard General Insurance, and New India Assurance. Each company has its strengths and weaknesses, with varying EPS, PE ratios, and RoNW.

The book-running lead managers for the Niva Bupa Health Insurance IPO are ICICI Securities, Morgan Stanley India, Kotak Mahindra Capital, Axis Capital, HDFC Bank, and Motilal Oswal Investment Advisors. KFin Technologies is the registrar to the IPO.

Overall, the strong subscription level and grey market premium suggest positive sentiment towards Niva Bupa Health Insurance IPO. Investors await the IPO allotment and the anticipated listing on November 14th.

Read More