Niva Bupa Health Insurance Files For ₹3,000cr IPO

Niva BUPA Health Insurance, a well-known name in the Indian Insurance market, has recently announced that it has filed a Red Herring Prospectus with capital market regulator SEBI, with a target to raise Rs 3,000 crore through an initial public offering (IPO).

It is one of the biggest independent health insurance companies in India, and it had a Gross Direct Written Premium (GDPI) of Rs 5,499.43 crore in fiscal 2024. The company has 210 physical branches in 22 Indian states and 4 union territories as of March 31, 2024.

But what does launching mean for the company and potential Investors? Let’s have a look at them thoroughly. 

What is An IPO- Initial Public Offering

An Initial Public Offering, or IPO, is when a private company decides to sell its shares to the general public for the first time. This process helps the company raise money to grow its business, pay off debts, or fund new projects.

According to the Red Herring Prospectus submitted by Niva Bupa Health To SEBI, they are offering fresh issuance of equity shares worth Rs 800 crore and an offer for sale of up to Rs 2,200 crore by a promoter and an investor shareholder. 

Niva Bupa is mostly run by Bupa, an international healthcare company with its headquarters in the UK. The insurance company is currently owned by Bupa Singapore Holdings Pte (62.27%) and Fettle Tone LLP (27.16%). Under this OFS (Offer For Sale), Fettle Tone LLP will sell their Rs 1880 crore worth of shares, and promoter Bupa Singapore Holdings Pte Ltd will sell its shares valued at Rs 320 crores. The equity shares are proposed to be listed on the BSE and NSE.

The company in its prospectus filed on Saturday, said it might issue securities worth up to Rs 160 crore as part of a "pre-IPO placement". The size of the new issue will be smaller if this placement is done.

The company’s growth is apparent from the table below:

Why is Niva Bupa Going Public?

Niva Bupa, which was earlier known as Max Bupa Health Insurance, likely sees this as an opportunity to expand its business. The health insurance sector in India is booming rapidly, especially after COVID-19. The pandemic made people more aware of the importance of health coverage. A total of Rs 625 crore net proceeds generated from the new offering will be used by the company to increase its capital base and improve its solvency. Some of the money will also be used for general business purposes, to invest in new technologies, to improve its services, or even to acquire other companies.

After Star Health & Allied Insurance Company, this is the second independent health insurer that wants to go public. If successful, this IPO could be one of the largest in the Indian Insurance sector. Other companies might also follow their lead if they see Niva Bupa doing well. This will potentially lead to more competition and better services for customers. 

For people considering investing in Niva Bupa’s IPO, it's an opportunity to own part of a growing health Insurance company. Even if you do not invest, this news is important because it reflects the growing importance of insurance companies in India. With the growth of these companies, better and more affordable health insurance options will be available to everyone. This is a well-known sign of how the Indian economy and financial markets are evolving, a development worth watching.