Health Insurer Niva Bupa Files Draft Prospectus for Rs 3,000 Crore IPO

Niva Bupa Health Insurance Company Ltd, backed by True North, has submitted a draft red herring prospectus to the Securities Exchange Board of India to raise Rs 3,000 crore through an initial public offering (IPO).

The IPO includes a fresh issue worth Rs 800 crore and an offer for sale (OFS) up to Rs 2,200 crore by existing shareholders and promoters. The majority owner is British United Provident Fund (Bupa).

The OFS will see Bupa Singapore Holdings Pte selling shares worth up to Rs 320 crore and Fettle Tone LLP up to Rs 1,880 crore. Bupa Singapore Holdings currently holds a 62.27% stake, while Fettle Tone LLP holds 27.86%.

The IPO is managed by ICICI Securities, Morgan Stanley India, Kotak Investment Capital, Axis Capital, and HDFC Bank.

Proceeds from the fresh issue amounting to Rs 625 crore will be used to enhance the capital base and improve solvency levels.

Niva Bupa aims to be India's top health insurance platform, offering services through the 'NivaBupa Health' app and website.

As of March 31, 2024, Niva Bupa had 14.73 million active insured lives, with a gross written premium (GWP) of Rs 5,607.57 crore, up from Rs 4,073.03 crore the previous year. The GWP grew at a CAGR of 41.27% from Fiscal 2022 to 2024, with combined ratios improving annually: 98.76% in 2024, 97.13% in 2023, and 107.41% in 2022. The network of hospitals expanded to 10,460 by March 31, 2024, from 8,562 on March 31, 2022.

For FY24, the earned premium was Rs 3,811.25 crore, up from Rs 2,662.75 crore the previous year. Total income for the fiscal year was Rs 4,118.63 crore, compared to Rs 2,859.24 crore the previous year. Net profit for the year was Rs 81.85 crore, up from Rs 1.25 crore the previous year.

The firm incurred claims worth Rs 2,249.54 crore in FY24, compared to Rs 1,439.31 crore the previous year. The claims ratio increased to 59.02% from 54.05% last year.

Over 100 companies have raised around $4 billion through public issues this year, more than double the amount raised by June last year, according to Reuters, quoting data from LSEG.

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