Krishnan Ramachandran, managing director (MD) and chief executive officer (CEO), Niva Bupa Health Insurance
The IPO is a combination of fresh issuance of equity shares worth Rs 800 crore and an offer for sale of up to Rs 1,400 crore by promoters. The company reduced the issue size as it was earlier looking to raise Rs 3,000 crore.
Mumbai: Niva Bupa Health Insurance Company Ltd, formerly Max Bupa Health Insurance Company, on Monday said it has fixed a price band of Rs 70-74 per share for its Rs 2,200 crore initial share sale.
The health insurer’s valuation currently stands at Rs 13,500 crore.
The Initial Public Offering (IPO) will open for public subscription on November 7 and conclude on November 11. The bidding for anchor investors will open for a day on November 6, the company announced.
The IPO is a combination of fresh issuance of equity shares worth Rs 800 crore and an offer for sale of up to Rs 1,400 crore by promoters. The company reduced the issue size as it was earlier looking to raise Rs 3,000 crore.
Krishnan Ramachandran, managing director (MD) and chief executive officer (CEO), Niva Bupa Health Insurance, said the health insurance industry to grow at a CAGR of 17–18 per cent and the company will grow above the industry.
He denied any discussions with Life Insurance Corporation (LIC), which is looking for a majority stake in a standalone health insurer.
The company intends to utilise the net proceeds from the fresh issuance towards boosting its capital base to strengthen solvency levels and a portion will be used for general corporate purposes.
“Post the IPO, the solvency will rise above 3 from the existing 2.55. The primary capital raise we believe will put us in good stead into the foreseeable future as far as funding the growth of the company and the solvency requirements are concerned. It is more about a solution that gives a permanency to the company,” added Ramachandran.
Under the OFS, Fettle Tone LLP will sell shares to the tune of Rs 1,050 crore and Bupa Singapore Holdings Pte Ltd will offload shares valued Rs 350 crore.
At present, Bupa Singapore Holdings Pte owns 62.19 per cent stake while Fettle Tone LLP holds 26.8 per cent stake in the insurance firm.
This will be the second standalone health insurer looking to float an IPO, after Star Health & Allied Insurance Company.
The company said that 75 per cent of the issue size has been reserved for qualified institutional buyers, 15 per cent for non-institutional buyers and the remaining 10 per cent for retail investors.
Niva Bupa Health Insurance Company is one of the leading standalone retail health insurers (SAHI) in India, with a Gross Direct Written Premium (GDPI) of Rs 5,499.43 crore in fiscal 2024.
The insurance firm’s gross witten premium (GWP) increased by 37.68 per cent to Rs 5,607.57 crore in fiscal 2024 from Rs 4,073.03 crore in fiscal 2023. Further, profit surged to Rs 81.85 crore in fiscal 2024 from Rs 12.54 crore in fiscal 2023.