Niva Bupa Health Insurance Lists at 6.08% Premium Above Issue Price on BSE/NSE

Niva Bupa Health Insurance Company Limited, established in 2008 as a joint venture between Bupa Group and Fettle Tone LLP, made its stock market debut on Thursday, 14th November 2024, with its shares listing on both BSE and NSE. The company, which has insured 14.73 million active lives as of March 2024 and operates across 22 states and four union territories, becomes the second standalone health insurer to go public after Star Health.

Listing Details

• Listing Time & Price: Niva Bupa shares were listed at ₹78.50 per share at open on both BSE and NSE, marking a positive start to its journey as a publicly traded company.
• Comparison to Issue Price: The listing price represents a decent premium over the IPO issue price. Niva Bupa had set its IPO price band from ₹70 to ₹74 per share, with the final issue price being fixed at the upper end of ₹74.
• Percentage Change: The listing price of ₹78.50 translates to a premium of 6.08% over the issue price of ₹74.

First-Day Trading Performance

• Opening vs. Latest Price: As of 09:40 AM IST, the stock was maintaining its opening price of ₹78.50.
• Market Capitalisation: As of 09:40 AM IST, the company's market capitalisation stood at ₹14,342.16 crore, with free float market cap at ₹1,864.48 crore.
• Trading Volume: The traded volume was 1.34 lakh shares with a traded value of ₹1.05 crore as of 09:40 AM IST.

Market Sentiment and Analysis

• Market Reaction: The stock maintained stability at its opening price in early trading.
• Subscription Rate: Niva Bupa Health Insurance IPO was modestly oversubscribed by 1.90 times (as of November 11, 2024, 6:19:08 PM), with retail investors leading at 2.88 times subscription, followed by QIBs at 2.17 times, and NIIs at 0.71 times.
• Trading Range: In early trading, the stock maintained a steady price of ₹78.50 without any fluctuation recorded yet.

Growth Drivers and Challenges

• Expected drivers of future performance:
• Diverse product portfolio
• Technology-driven customer service
• Strong Bupa brand association
• Expertise in claims management
• Rapid GWP growth of 41.27% CAGR (FY22-24)

Potential challenges:

• Aggressive valuation concerns
• Recent profitability track record
• Competitive health insurance sector
• Regulatory changes risk
• Claims ratio management

Utilisation of IPO Proceeds

Niva Bupa plans to use the funds for:

• Augmenting capital base to strengthen solvency levels
• General corporate purposes

Financial Performance

The company has shown strong growth:

• Revenue increased by 44.05% to ₹4,118.63 crore in FY2024 from ₹2,859.24 crore in FY2023
• Profit After Tax rose significantly to ₹81.85 crore in FY2024 from ₹12.54 crore in FY2023
• Q1 FY2025 showed revenue of ₹1,124.90 crore with a loss of ₹18.82 crore

As Niva Bupa begins its journey as a listed entity, market participants will closely monitor its ability to maintain growth momentum and improve profitability. The positive listing suggests optimistic market sentiment towards the company's prospects in the growing health insurance sector.