Niva Bupa, formerly known as Max Bupa, has announced its plans to go public, marking a significant milestone in the company’s journey. By filing a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI), the insurance giant is setting its sights on raising ₹3,000 crore through an initial public offering (IPO) and an offer for sale (OFS).
IPO and OFS Breakdown
The upcoming IPO is structured to include two components: a fresh issue of ₹800 crore and an offer for sale (OFS) valued at ₹2,200 crore. The OFS will see major stakeholders reducing their holdings. Bupa Singapore Holdings Pte, which currently holds 62.27% of Niva Bupa, will divest a portion of its shares to raise ₹320 crore. Additionally, Fettle Tone LLP, with a 27.86% stake, plans to sell shares worth ₹1,880 crore.
Utilization of Funds
Niva Bupa aims to utilize the proceeds from the fresh issue to bolster its capital base, strengthen its solvency levels, and support general corporate purposes. This strategic move is expected to enhance the company’s financial position as it continues to expand its operations and offerings in the rapidly growing health insurance market.
Lead Managers and Price Band
While the price band for the IPO is yet to be disclosed, Niva Bupa has engaged several prominent institutions as book-running lead managers, including ICICI Securities, Morgan Stanley India, Kotak Mahindra Capital Company, Axis Capital, HDFC Bank, and Motilal Oswal Investment Advisors. KFin Technologies will serve as the registrar for the issue, ensuring a smooth and transparent process for investors.
Open Demat Account with us to start investing!
Financial Performance: Steady Growth
Niva Bupa’s financial trajectory in recent years showcases impressive growth. In FY22, the company’s total income stood at ₹1,884.5 crore. This figure rose to ₹2,859.2 crore in FY23 and reached ₹4,118.6 crore in FY24, reflecting the company’s increasing market presence.
The profit after tax (PAT) in FY24 was ₹81.9 crore, a significant leap from the ₹12.54 crore reported in FY23. This turnaround is especially remarkable considering the company faced a loss of ₹196.53 crore in FY22.
Impressive Growth in Premium and Hospital Network
The company has seen substantial growth in key metrics. As of March 31, 2024, Niva Bupa had 14.73 million active insured lives, a notable increase from previous years. Its gross written premium (GWP) surged to ₹5,607.57 crore in FY24, compared to ₹4,073.03 crore in FY23. Over the period from FY22 to FY24, the company’s GWP grew at a compound annual growth rate (CAGR) of 41.27%.
Niva Bupa’s combined ratios—a key measure of an insurer’s profitability—have also shown steady improvement, dropping from 107.41% in FY22 to 97.13% in FY23, and further improving to 98.76% in FY24.
Upcoming IPOs to watch: Apply and invest in the future!
In terms of network expansion, the company has grown its network of hospitals significantly, from 8,562 in March 2022 to 10,460 by March 2024. This extensive network strengthens Niva Bupa’s ability to serve its policyholders across the country.
A Bright Future for Niva Bupa
As Niva Bupa moves forward with its IPO plans, the company is well-positioned for continued growth. With a strong financial foundation, an expanding customer base, and a clear focus on innovation through its digital platforms, the insurer is poised to become a dominant player in India’s health insurance landscape. Investors and stakeholders alike will be watching closely as the company embarks on this new chapter of growth and expansion.
Financial Calculators: SIP Calculator | SWP Calculator | Compound Interest Calculator | EMI Calculator | FD Calculator | Retirement Calculator | Option Value Calculator | Inflation Calculator | Lumpsum Calculator
Popular Stocks: ICICI Bank Share Price | HDFC Bank Share Price | CDSL Share Price | UPL Share Price | TCS Share Price | BHEL Share Price | Trident Share Price | IRFC Share Price | Adani Power Share Price