Niva Bupa Health Insurance Company Ltd. (formerly Max Bupa Health Insurance Company Limited) is set to debut on the Indian stock market with a ₹22,000 Crore Book Built Issue. This IPO comprises a Fresh Issue of 1,081.08 Lakh Shares worth ₹800 Crores and an Offer for Sale of 1,891.89 Lakh Shares, totaling ₹14,000 Crores. The subscription period is from November 7, 2024, to November 11, 2024, with allotment finalized by November 12, 2024, and listing on the BSE and NSE expected by November 14, 2024.

The IPO price band for Niva Bupa Health Insurance has been set between ₹70 and ₹74 per equity share, which will position the company with a market capitalization of ₹13,519.99 Crores if priced at ₹74. The lot size is 200 shares, requiring a minimum investment of ₹14,800 for retail investors. High-Net-Worth Individuals (HNIs) need to invest in 14 lots (2,800 shares), totaling ₹2,07,200.

The book-running lead managers for this issue are top players including Morgan Stanley India, ICICI Securities, Axis Capital, and Kotak Mahindra Capital, while KFin Technologies serves as the registrar for the issue.

Niva Bupa Health Insurance IPO Grey Market Premium (GMP)

As of the latest reports, the Grey Market Premium (GMP) for Niva Bupa Health Insurance IPO is ₹0, indicating that there is no significant demand in the grey market, suggesting limited expectations for listing gains. Since the GMP reflects market speculation before the official listing, it’s advisable to wait for the actual listing date for clearer price discovery.

Live Subscription and Allotment Status

As of 11:00 AM on November 11, 2024, Niva Bupa Health Insurance IPO was subscribed 1.28 times on its final day of the subscription period. Investors eager to check their allotment status can visit the registrar’s website on November 12, 2024, and follow these steps:

1. Navigate to the IPO allotment status page.
2. Select Niva Bupa Health Insurance IPO from the dropdown list.
3. Enter your application number, PAN, or DP Client ID and submit to view the status.

Financial Performance and Valuation

The company’s revenue from operations for FY2024, FY2023, and FY2022 stood at ₹41,186.31 Million, ₹28,592.35 Million, and ₹18,845.42 Million, respectively. EBITDA for FY2024 improved to ₹1,379.95 Million from ₹712.82 Million in FY2023. In FY2022, Niva Bupa posted a negative EBITDA of -₹1,632.37 Million. The Profit After Tax (PAT) has shown a strong rebound in FY2024 at ₹818.52 Million, compared to ₹125.4 Million in FY2023 and a loss of -₹1,965.25 Million in FY2022.

The pre-issue EPS stands at ₹0.51, and post-issue EPS is expected at ₹0.45. The pre-issue P/E ratio is 145.09x, while the post-issue P/E ratio rises to 164.44x, which is significantly higher than the industry P/E ratio of 38.60x. With an RoE of 5.68% for FY24, these numbers suggest that the IPO is fully priced, and potential investors should weigh these factors carefully.

Objective of the IPO

Proceeds from the Fresh Issue will be utilized primarily for:

1. Capital Augmentation: Strengthening the company’s solvency levels to support future growth.
2. General Corporate Purposes: Funding general corporate needs to support operational expansion.

Investment Considerations and Recommendations

With a fully priced IPO and limited listing gain potential (as per the GMP), Niva Bupa Health Insurance’s IPO may not offer immediate returns for short-term investors. However, considering the strong backing of Bupa Group and True North, alongside the company’s growth in India’s expanding health insurance sector, this could be a strategic investment for long-term growth. Investors should evaluate their own financial goals and risk appetite before subscribing.

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