Niva Bupa, a Gurugram-based health insurance service provider, opens for public subscription today. The company aims to raise Rs 2,200 crore at the upper end of the IPO range. It has already raised Rs 990 crore from anchor investors, as it allocated 13,37,83,783 equity shares at Rs 74 apiece. The bidding was held previously, which concluded on November 6.

Global investors including Morgan Stanley, Fidelity, Government Pension Fund Global, Templeton Emerging Markets Investment Trust, First Sentier Investors International, The Scottish Oriental Smaller Companies and others participated in the anchor book.

Investors can bid for the issue in the fixed price band of Rs 70-74 apiece for a minimum of 200 equity shares and its multiples thereafter. The IPO can be subscribed until Monday, November 11

Shares of Niva Bupa are expected to debut on the BSE and NSE on Thursday, November 14, 2024.

Niva Bupa IPO day-

Companies’s IPO comprises of fresh issue of 108,108,108 shares and an offer for sale of 189,189,189 shares with a face value of Rs 10 apiece. The IPO price band is set at 70-74, with a lot size of 200 shares. Investors can bid for a minimum of 200 shares and in multiples thereof. For a retail investor, 14,800 will be the minimum investment needed for the first lot of the IPO.

Niva Bupa Stays Flat In Grey Market

Unexpectedly, the health insurance company, Niva Bupa, stayed unexciting and was trading flat in the grey market, Ahead of its IPO launch. The Grey Market Premium (GMP) remained Zero, according to the sources tracking grey market.

The company has Kfin Technologies as the registrar for the Niva Bupa IPO. The book-running lead managers are Morgan Stanley India Company, ICICI Securities, Kotak Mahindra Capital Company, Axis Capital, HDFC Bank, and Motilal Oswal Investment Advisors

Should You Subscribe To The Niva Bupa IPO?

Here are opinions from different Brokerage Firms who have different views–

• Anand Rathi Research
• Rating: Subscribe for long-term
• In India, currently, Niva Bupa Health Insurance is a prominent health insurance provider. Niva Bupa offers a diverse range of products for customers.The health insurance they offer are designed to meet the needs of customers at every stage of life, said Anand Rathi Research.

“The company aims to build a comprehensive, customer-focused health insurance platform and healthcare ecosystem, offering customers access to a variety of services, including wellness programs, doctor consultations, diagnostics, and medicine delivery. The company is valued at P/BV of 6.1 times. We believe that the issue is fully priced and recommend ‘subscribe for long term,” it said.

• Swastika Investmart
• Rating: Subscribe with caution
• Swastika Investmart called IPO pricing somewhat aggressive. The Brokerage firm Swastika Investmart has recommended the IPO only for high-risk investors. They pointed out although the company is a leading player in India’s health insurance market and one of the fastest-growing in the sector, its earnings were positive in FY23, but not in the first quarter of the current Fy, showing negative results. According to Swastika Investmart, the IPO pricing appears aggressive.

• Bajaj Broking- Subscribe for long-term
• Rating: Subscribe for long term  
• Analysts at Bajaj Broking have also recommended the IPO for long-term investors, although calls it aggressively priced.

“If we annualise FY25 earnings to the post-IPO fully diluted equity base, the asking price results in a negative price-to-earnings (P/E) ratio. Based on FY24 earnings, the P/E ratio stands at 642.22. Consequently, the issue appears to be aggressively priced,” said the analysts in their report.

• Mehta Equities
• Rating: Subscribe for long term
• Mehta Equities positively believes that Niva Bupa Health Insurance IPO brings investors an opportunity to invest in a growing standalone health insurers with a growing product portfolio, strategic innovation and digital advancements. It has managed to increase the average ticket size and improve its claims ratio, demonstrating operational efficiency, said Mehta Equities.

“With a CAGR of 41.27 per cent in GWP from FY22-24, Niva Bupa is strategically positioned to capitalize on India’s growing health insurance market. Hence, by looking at all the attributes we recommend investors to ‘subscribe’ the Niva Bupa Health Insurance Company IPO for long term perspective only,” it said.