With D-Street debut, Niva Bupa gets a capital shot in the arm

Synopsis

Niva Bupa, India's first listed multinational health insurer, debuted on the stock exchanges with a 5% premium. The company raised ₹800 crore in fresh capital during the IPO to boost its capital reserves.

Mumbai : Niva Bupa debuted on the stock exchanges Thursday with a 5% premium, becoming India’s first listed multinational health insurer.

The company initially raised 5-6% equity in private placements, setting a valuation benchmark that strengthened its IPO appeal.

Liberalisation of foreign ownership in the insurance sector — now up to 74% — enabled British parent Bupa to increase its stake to a majority earlier this year.

“This listing as the first foreign-majority health insurer in India is not only a new chapter for Niva Bupa but shows our commitment to the Indian market for the long term,” said Roger Davis, Bupa’s Group chairman.

Bupa will continue to be the largest shareholder in the company, he said. Bupa, holding a 56% stake, is looking to retain its majority share as the company scales.

Niva Bupa listed at ₹78.14 on the NSE, a premium of 5.6% over its issue price of ₹74. It closed at ₹74.07.

The journey toward a public listing began 18 months ago as Niva Bupa, meeting its five-year goals within three years, sought fresh capital to support its accelerated growth, said Divya Sehgal, partner, True North, which had invested in Bupa locally.

Niva Bupa has seen a 30% increase in premiums in the first half of the current fiscal year. Last year, the company crossed ₹5,500 crore in premium collection and has now reached a stage where profitability is complementing its scale. Bupa has raised ₹800 crore in fresh capital du ring the IPO to boost its capital reserves, which will support its expansion needs. This, along with another ₹800 crore infusion earlier this year, has more than doubled the company’s net worth, which has positioned it for future growth.

“With the new capital, we are wellprepared to meet the demands of our expansion into new locations and the increasing scale of our operations,” said Sehgal.

Niva Bupa’s solvency ratio is expected to stay “meaningfully ahead of 2,” Sehgal said. That compares with the regulatory requirement of 1.5. While there have been questions about its claim settlement ratio of 91%, Niva Bupa remains confident in its offerings, saying that Niva Bupa is well-regarded for customer service quality.
With D-Street Debut, Niva Bupa Gets a Capital Shot in the Arm

With the regulator’s focus on Insurance for All by 2047, Niva Bupa is expecting growth to come from new customers. On expanding the business, Davis said India’s underdeveloped health insurance market means customer acquisition is still largely through new subscribers.

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