Niva Bupa Health Insurance shares list at ₹78.14 on NSE, a premium of 5.5% from IPO price

Niva Bupa Health Insurance IPO listing: Niva Bupa Health Insurance shares made a decent debut on the bourses on Thursday, November 14 as they listed at ₹78.14 on NSE, a premium of 5.5 percent over the issue price of ₹74. Meanwhile, on BSE, it listed at ₹78.5, up 6.08 percent from IPO price.

Niva Bupa's initial public offering (IPO), valued at ₹2,200 crore, was open for subscription from November 7 to November 11. The health insurance services provider's shares were priced in the range of ₹70-74 per share for the issue.

Following the three days of bidding, Niva Bupa IPO closed with strong demand, garnering 1.9 times bids. The IPO received bids for 31.13 crore shares against 16.3 crore shares on offer. The retail investor segment was booked 2.88 times, while the non-institutional investors (NII) category wasn't fully subscribed and was bid 0.71 times. The qualified institutional buyers (QIB) portion was subscribed 2.17 times.

About the IPO

Niva Bupa IPO was a combination of fresh issue of 10.81 crore shares aggregating to ₹800.00 crore and offer for sale of 18.92 crore shares aggregating to ₹1,400.00 crore. The company raised ₹990 crore from anchor investors on November 6, 2024.

Retail investors could apply with a minimum lot size of 200 shares, requiring a minimum investment of ₹14,800. The company plans to use the net proceeds to bolster its capital base, aiming to enhance its solvency levels, as well as for general corporate purposes.

Of the net offer, 30 percent is reserved for qualified institutional bidders (QIBs). Non-institutional investors (NIIs) and retail investors will have allocations of 10 percent and 10 percent of the net offer, respectively.

ICICI Securities Limited, Morgan Stanley India Company Pvt Ltd, Kotak Mahindra Capital Company Limited, Axis Capital Limited, Hdfc Bank Limited and Motilal Oswal Investment Advisors Limited were the book running lead managers of the Niva Bupa Health Insurance IPO, while Kfin Technologies Limited was the registrar for the issue.

Brokerage Views

Most brokerages have suggested subscribing to the Niva Bupa IPO, with various perspectives on investment horizons.

Anand Rathi has advised investors to subscribe to the IPO with a long-term outlook, highlighting the company's ambition to create a robust, customer-centric health insurance platform enriched with wellness programs, doctor consultations, diagnostics, and medicine delivery services. The analysts noted that Niva Bupa plans to further expand its health insurance ecosystem by developing health assessment tools, wellness content, and partnerships for digital consultations and home delivery of medications. At the upper price band, the company's valuation stands at a P/BV of 6.1x, translating to a market capitalization of ₹13,520 crore post-issue. Despite the valuation appearing fully priced, Anand Rathi maintained a ‘Subscribe – Long Term’ recommendation.

Meanwhile, Swastika Investmart expressed a more cautious stance, recommending the IPO primarily for high-risk investors. While acknowledging Niva Bupa's leadership and rapid growth in the Indian health insurance market, Swastika highlighted that the company's profitability was positive in FY23 but noted a return to negative earnings in the first quarter of the current fiscal year. The brokerage firm pointed out that the IPO pricing seemed aggressive, warranting a more careful approach for potential investors.

About the Company

Established in 2008, Niva Bupa Health Insurance Company Limited is a joint venture between the Bupa Group and Fettle Tone LLP, specializing in health insurance. The company delivers an all-encompassing approach, enabling customers to access a broad health ecosystem and service capabilities via its Niva Bupa Health mobile app and website. Between the financial years ending March 31, 2023, and March 31, 2024, the company experienced a 44.05% rise in revenue, alongside a significant 552.73% increase in profit after tax (PAT).

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.