On Thursday, November 14, Niva Bupa Health Insurance shares made a respectable market debut, listing at ₹78.14 on the NSE, 5.5 per cent above the issue price of ₹74. It listed at ₹78.5 on the BSE, up 6.08 per cent from the IPO price.
Subscriptions for Niva Bupa’s ₹2,200 crore initial public offering (IPO) were accepted from November 7 to November 11. The issue price of the health insurance services provider’s shares was between ₹70 and ₹74 per share.
After three days of bidding, the Niva Bupa IPO closed at 1.9 times the bids, indicating high demand. Out of the 16.3 crore shares available, bids for 31.13 crore shares were received during the IPO. While the non-institutional investors (NII) category was not completely subscribed and was bid 0.71 times, the retail investor sector was booked 2.88 times. 2.17 subscriptions were made to the qualified institutional buyers (QIB) portion.
The Niva Bupa IPO consisted of an offer to sell 18.92 crore shares worth ₹1,400.00 crore and a fresh issue of 10.81 crore shares for ₹800.00 crore. On November 6, 2024, anchor investors contributed ₹990 crore to the company.
With a minimum lot size of 200 shares and a minimum investment of ₹14,800, retail investors were eligible to apply. The company intends to use the net proceeds for general corporate objectives and to strengthen its capital base to increase its levels of solvency.
Thirty per cent of the net offer is set aside for qualified institutional bidders (QIB). Ten per cent will go to individual investors, and ten percent will go to non-institutional investors (NIIs).
The book-running lead managers of the Niva Bupa Health Insurance IPO were 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. The issue’s registrar was Kfin Technologies Limited.
With differing opinions on investment horizons, most brokerages have recommended subscribing to the Niva Bupa IPO.
Anand Rathi, who has highlighted the company’s goal to build a strong, customer-focused health insurance platform enhanced with wellness initiatives, doctor consultations, diagnostics, and medication delivery services, has recommended investors subscribe to the IPO with a long-term outlook. By creating wellness content, digital consultation relationships, and home medication delivery, Niva Bupa intends to further grow its health insurance ecosystem, according to the analysts. The company’s valuation at the highest price range is 6.1x P/BV, which translates to a post-issue market capitalization of ₹13,520 crore. Even though the valuation was fully priced, Anand Rathi nonetheless recommended “Subscribe – Long Term.”
A more conservative approach was taken by Swastika Investment, which advised the IPO mainly for high-risk investors. Although Swastika acknowledged Niva Bupa’s dominance and quick expansion in the Indian health insurance market, she also pointed out that although the company’s profitability was positive in FY23, the first quarter of the current fiscal year saw a return to negative earnings. Potential investors should exercise greater caution, the brokerage company noted, as the IPO pricing was aggressive.
