Niva Bupa Health Insurance Ltd (formerly Max Bupa) has filed a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) to raise funds through an initial public offering (IPO) worth Rs 3,000 crore.
The IPO will comprise a fresh issuance of shares worth Rs 800 crore and an offer for sale (OFS) of up to Rs 2,200 crore by the promoter and investor selling shareholders. Specifically, the OFS will include up to Rs 320 crore by Bupa Singapore Holdings Pte. Ltd. and up to Rs 1,880 crore by Fettle Tone LLP.
The company also announced the possibility of a “pre-IPO placement” of up to Rs 160 crore. If this placement is completed, the size of the fresh issue will be reduced accordingly.
Allocation Structure: The IPO will be conducted through the book-building process. At least 75% of the offer will be allocated on a proportionate basis to Qualified Institutional Buyers (QIBs), up to 15% to Non-Institutional Bidders, and up to 10% to Retail Individual Bidders.
Use of Proceeds: Niva Bupa intends to utilize Rs 625 crore of the net proceeds from the fresh issuance to augment its capital base and strengthen solvency levels, with the remaining funds earmarked for general corporate purposes.
Company Overview: Niva Bupa claims to be one of India’s largest and fastest-growing standalone retail health insurers (SAHI). In Fiscal 2024, the company reported a Gross Direct Written Premium (GDPI) of Rs 5,499.43 crore, capturing a 16.24% market share in the Indian SAHI segment. As of March 31, 2024, Niva Bupa had insured 14.73 million lives.
Sales Channels and Growth: According to a Redseer report, Niva Bupa’s direct sales channel was the highest among SAHIs in terms of total health GDPI contribution in Fiscal 2024. The company’s GWP from direct online sales increased to Rs 732.98 crore in Fiscal 2024 from Rs 527.68 crore in Fiscal 2022, driven by continued investments in digital marketing and search engine optimization.
Niva Bupa employs a diversified channel mix, with corporate agents (27.25%), individual agents (32.07%), and broker channels (27.04%) contributing significantly to its business by GDPI in Fiscal 2024.
Financial Performance: Niva Bupa’s overall GWP increased at a compound annual growth rate (CAGR) of 41.27% from Fiscal 2022 to Fiscal 2024. The company reported a profit after tax of Rs 81.85 crore in Fiscal 2024, a significant increase from Rs 12.54 crore in Fiscal 2023.
Operational Highlights: The company boasts a network of 10,460 hospitals, including 326 Preferred Partner Network (PPN) Hospitals. It has a claims settlement ratio of 91.93% for Fiscal 2024, with 81.50% of pre-authorized cashless claims approved in less than 30 minutes.
Niva Bupa’s investment yield rose to 7.1% in Fiscal 2024 from 6.6% in Fiscal 2022, with assets under management (AUM) increasing to Rs 5,458.23 crore in Fiscal 2024 from Rs 2,401.31 crore in Fiscal 2022.
The company is majorly controlled by Bupa Singapore Holdings Pte. Ltd. and Bupa Investments Overseas Limited, part of the global healthcare group Bupa. Established in 1947, Bupa serves over 50 million customers worldwide.
It’s equity shares are proposed to be listed on both BSE and NSE.
ICICI Securities Limited, Morgan Stanley India Company Limited, Kotak Mahindra Capital Company Limited, Axis Capital Limited, HDFC Bank Limited, and Motilal Oswal Investment Advisors Limited are the book-running lead managers for the IPO, with KFin Technologies Limited as the registrar.
