Niva Bupa Health Insurance, a well-known name in India’s health insurance sector, is set to launch its initial public offering (IPO) on November 7, 2024. The company aims to raise Rs 2,200 crore, with a price band set at Rs 70-74 per share. Investors have until November 11 to participate in this public offering. Here’s a quick guide covering key points, including details on share allotment, company valuation, and shareholding structure.
IPO Price Band, Issue Size, and Key Dates
Niva Bupa’s IPO will see both a fresh issue of shares and an offer for sale (OFS) by existing promoters. The fresh issue aims to raise Rs 800 crore, while promoters are expected to offload shares worth Rs 1,400 crore, marking a significant opportunity for retail and institutional investors. Initially planning to raise Rs 3,000 crore, the company has scaled back its offering to Rs 2,200 crore. Here’s an overview of the key details:
- IPO Opening Date: November 7, 2024
- IPO Closing Date: November 11, 2024
- Price Band: Rs 70-74 per share
- Lot Size: Minimum 200 shares and multiples thereof
- Expected Market Cap: Rs 13,520 crore at the upper price band
- Allotment Date: November 12, 2024
- Listing Date: Expected on November 14, 2024, on NSE and BSE
Gray Market Premium (GMP) Update
As of November 6, the Gray Market Premium (GMP) for Niva Bupa remains at zero, indicating a neutral stance in the unlisted market. While GMP can offer insights into investor sentiment, it’s crucial to remember that it isn’t a guaranteed indicator of the stock’s performance on listing day.
Shareholding Structure Before IPO
Before the IPO, Niva Bupa’s promoters hold 89.07% of the company’s shares. Post-IPO, this will see some dilution. Here’s a breakdown of the current shareholding:
- Bupa Singapore Holdings Pte: 62.19%
- Fatal Tone LLP (True North): 26.80%
- Public Shareholders:
- India Business Excellence Fund IV holds 2.81%
- V-Sciences Investments PTE holds 2.60%
- SBI Life Insurance holds 1.3%
- A91 Emerging Fund II LLP holds 1.03%
Key Financials: Profit and Operating Margins
In FY24, Niva Bupa recorded a net profit of Rs 81.85 crore, a substantial jump from Rs 12.5 crore the previous year. However, operating profit saw a decrease from Rs 350.9 crore to Rs 188 crore. The company’s quarterly results from April to June 2024 indicated a net loss of Rs 18.8 crore, contrasting with a Rs 72.2 crore loss in the same quarter the previous year. Operating profit in this period stood at Rs 23.2 crore.
These financial figures showcase growth potential but also highlight a need to strengthen operating margins as the company scales. A significant portion of the funds from the fresh issue will be directed toward increasing the capital base, helping Niva Bupa maintain healthy solvency levels and support overall growth.
Who’s Managing the IPO?
The IPO is being managed by a consortium of well-known investment banks, ensuring that investors can participate smoothly. Here’s the list of lead managers:
- ICICI Securities
- Morgan Stanley India
- Kotak Mahindra Capital
- Axis Capital
- HDFC Bank
- Motilal Oswal Investment Advisors
KFin Technologies is the registrar for the IPO, handling allotment and other administrative processes.
Reserved Quotas for Different Investors
In line with SEBI guidelines, Niva Bupa’s IPO allocates shares across various investor categories:
- Qualified Institutional Buyers (QIBs): 75% of the total offer
- Non-Institutional Investors: 15%
- Retail Investors: 10%
Niva Bupa’s Growth Strategy
Funds from the IPO will be used primarily to strengthen Niva Bupa’s capital reserves, which will enhance its solvency levels—an important aspect for any insurance company. Additionally, a portion of the proceeds will be allocated to general corporate expenses, ensuring flexibility in operations and business expansion.
With this IPO, Niva Bupa Health Insurance looks to expand its market presence, backed by a promising financial track record and a strategic focus on capital strengthening. The IPO provides investors a chance to join Niva Bupa as it charts its next growth phase.
