Niva Bupa Health Insurance Company Limited has launched its initial public offering (IPO), available for subscription from November 7, 2024, until November 11, 2024. The issue comprises a fresh equity sale of Rs 800 crore alongside an offer for sale of 1.89 crore shares. Under offer for sale, Bupa Singapore Holdings and Fettle Tone are offloading their stakes. Niva Bupa announced it has secured Rs 990 crore from anchor investors, with the bidding for these shares concluding on November 6, 2024. The company has set the IPO price band at Rs 70-74, with a minimum lot size of 200 shares, requiring a minimum investment of Rs 14,800. The current grey market premium (GMP) stands at zero.
Views From Brokers
Bajaj Broking: The broking house advises investors to "Subscribe for Long-term," citing Niva Bupa’s average earnings per share (EPS) of Rs 0.05 and a return on net worth (RoNW) of -2.58 per cent over the past three fiscal years. The IPO is priced at a price-to-book value (P/BV) of 6.19 based on net asset value (NAV) as of June 30, 2024, and estimates suggest that the P/E ratio could potentially be negative based on annualized FY25 earnings, the broker added.
BP Equities: The broker emphasizes Niva Bupa's innovative product launches aimed at Millennials and Generation Z, as a headwind going forward. "The company has demonstrated a track record of innovation, launching products with industry-first features. Through the company’s product innovation capabilities, they have developed products with selling propositions that have assisted in scaling the business," the broker said.
Mehta Equities: It called this IPO an opportunity to invest in one of India’s rapidly growing standalone health insurers, noting significant increases in assets under management and net premiums earned. Further profit has surged from Rs 12.25 crore in FY 2023 to Rs 81.85 crore in FY 2024, reflecting a growth of 552.7 per cent. "We think with high-margin, high-LTV products driving significant growth in their retail health business, the company has managed to increase the average ticket size and improve its claims ratio, demonstrating operational efficiency," it said.
Ventura Securities: It recommends a "subscribe" call, because of the health insurer's robust growth in Gross Written Premium (GWP) at Rs 5,608 crore for FY 2024, an increase from Rs 4,073 crore in the previous year. "The Net Earned Premium stood at Rs 3,811 crore, up from Rs 2,663 crore in the prior year. Investment income also saw an uptick, reaching Rs 163 crore compared to INR 131 crore in the previous year," it added.
