Health Insurer Niva Bupa gets Sebi nod for ₹3,000 crore IPO

Private equity firm True North, which leads Niva Bupa Health Insurance Ltd (formerly known as Max Bupa), has received final approval from the Securities and Exchange Board of India (SEBI) to raise ₹3,000 crore through an initial public offering (IPO).

The company submitted its IPO documents to SEBI on June 29, 2024. The IPO, with a face value of ₹10 per share, includes a fresh issue worth ₹800 crore and an offer for sale of up to ₹320 crore by Bupa Singapore Holdings Pte. Ltd., and up to ₹1,880 crore by Fettle Tone LLP.

The company plans to use the net proceeds from the fresh issuance, up to Rs. 625 crore, for bolstering its capital base to enhance solvency levels and for general corporate purposes.

The book-running lead managers for the offering are ICICI Securities Limited, Morgan Stanley India Company Private Limited, Kotak Mahindra Capital Company Limited, Axis Capital Limited, HDFC Bank Limited, and Motilal Oswal Investment Advisors Limited, with KFin Technologies Limited serving as the registrar.

About the company

Niva Bupa Health Insurance Company Limited is one of India’s largest and fastest-growing standalone health insurers (SAHI), with a Gross Direct Written Premium (GDPI) of ₹5,499.43 crore in Fiscal 2024. The company's mission is to "give every Indian the confidence to access the best healthcare" through its health insurance products and services, which help customers navigate their healthcare journey by offering access to a comprehensive health ecosystem. Niva Bupa follows a "digital-first" approach, integrating technology across every aspect of the customer experience, from onboarding to underwriting, claims, and renewals. According to Redseer, Niva Bupa held a 16.24% market share in the Indian SAHI market in Fiscal 2024, based on retail health GDPI.

Niva Bupa is the second standalone health insurer (SAHI) to aim for a listing on the Indian stock exchange through an IPO, following Star Health & Allied Insurance Company. It is India’s 3rd largest and 2nd fastest-growing SAHI based on Overall Health GDPI, which reached INR 54.94 billion in Fiscal 2024, growing at a compound annual growth rate (CAGR) of 41.37% from Fiscal 2022 to 2024.

The company leverages machine learning algorithms and logistic regression models to detect fraudulent claims, improving fraud detection success rates and reducing investigation referrals, thus minimizing customer experience disruption.

As of March 31, 2024, Niva Bupa had 143,074 agents and operated 210 branches across 22 states and 4 union territories in India. It distributes products through 64 banks and corporate agents, including major institutions such as HDFC Bank and Axis Bank, as per the Redseer Report. Niva Bupa has also demonstrated strong customer service performance, achieving a 91.93% claims settlement ratio in Fiscal 2024, with 81.50% of pre-authorized cashless claims approved within 30 minutes. It boasts the highest percentage of pre-authorized claims processed within one hour among all SAHIs, according to the Redseer Report.

Between Fiscal 2022 and 2024, Niva Bupa’s overall GWP grew at a CAGR of 41.27%, while its retail health GWP increased at a CAGR of 33.41%. The company’s overall health GDPI growth of 41.37% during this period was among the highest in the SAHI segment, nearly double the industry’s average growth rate of 21.42%, as reported by Redseer.