The ₹2,200-crore initial public offering (IPO) of Niva Bupa Health Insurance received 1.9 times subscription on the last day of the share sale on Monday. Given the muted response to the IPO, being offered at a price band of ₹70-74 per share, the grey market premium (GMP) of the health insurance company has fallen to zero, which means unlisted shares of Niva Bupa were trading at par with the issue price in the grey market. The shares of Niva Bupa Health Insurance IPO are expected to be listed on the BSE and NSE on November 14, 2024.
The company, formerly Max Bupa Health Insurance Company, got bids for 31,10,92,800 shares worth ₹2,302 crore against 16,35,13,515 shares on offer, as per NSE data. The issue received maximum responses from retail investors and qualified institutional buyers (QIB) as the quota reserved for them were subscribed 2.87 times and 2.17 times, respectively. The non-institutional investors (NIIs) segment was not fully subscribed as the portion set aside for them was booked 0.71 times.
As per the RHP filed with the SEBI, the company had reserved 75% of the issue for QIBs, 15% for NIIs, and remaining 10% for the retail investors. The lot size of the IPO was 200 equity shares and in multiples thereafter and the minimum application amount for retail investor was ₹14,800 for 1 lot, while the maximum was ₹192,400 for 13 lots.
The three-day IPO of Niva Bupa, which opened on November 7, was a combination of fresh issue of 10.81 crore shares worth ₹800 crore and offer for sale of 18.92 crore shares aggregating to ₹1,400 crore. Under the OFS, Bupa Singapore Holdings Pte. Ltd and Fettle Tone LLP. offloaded their stake in the company.
Ahead of the IPO, the company raised around ₹990 crore from anchor investors by allocating 13,37,83,783 equity shares at the upper end of the price band at ₹74 per share to 32 anchor investors. Out of the total allocation, 27.78% were allocated to 6 domestic mutual funds. The anchor book saw participation from foreign and domestic institutions, including some marquee investors such as Amansha Holdings, Zulia Investments, A91 Emerging Fund II LLP, Nippon Life, Tata Balance Advantage Fund, Axis Mutual Fund, Morgan Stanley Investment Fund.
The company intends to utilise the net proceeds from the fresh issuance towards augmentation of its capital base to strengthen solvency levels and for general corporate purposes.
Niva Bupa is the second standalone health insurer (SAHI) to eye at the Indian bourses through IPO, after Star Health & Allied Insurance Company. From fiscal 2022 to fiscal 2024, Niva Bupa's overall gross written premium (GWP) increased at a CAGR of 41.27%, while its retail health GWP grew at a CAGR of 33.41%. The company's overall health GDPI growth of 41.37% during this period is one of the highest among SAHIs and nearly double the industry's average growth rate of 21.42%, as reported by Redseer.
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