Niva Bupa Stock Soars 47% on GST Cut Speculation

Shares of Niva Bupa Health Insurance, a newcomer on Dalal Street, continued their upward momentum for the third consecutive trading session on Thursday, December 5. Niva Bupa Health Insuranc share price climbed another 11.2%, reaching a new all-time high of ₹109.34 per share. This brought the company's total three-day gain to an impressive 47%.

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The rally was attributed to media reports hinting at a potential reduction in the Goods and Services Tax (GST) rate for health and life insurance policies. As per a report by PTI, Finance Minister Nirmala Sitharaman mentioned that insurance costs for policyholders might decrease if the GST Council decides in favor of a rate cut. 

In a written reply to the Lok Sabha, Sitharaman stated that the Council, during its September 9 meeting, had recommended forming a Group of Ministers (GoM) to thoroughly examine GST-related issues concerning life and health insurance.

Currently, premiums for life and health insurance policies attract an 18% GST. The GST Council, led by Sitharaman and including state representatives, is expected to deliberate on the GoM’s findings during its next meeting on December 21.

Despite the speculation, Niva Bupa clarified that it has not received any official notification from the government about GST rate changes. In a regulatory filing on Wednesday, the company stated, “We are not aware of any developments beyond media reports and, therefore, cannot verify or confirm this news.”

Niva Bupa Health Insurance, a joint venture between the Bupa Group and Fettle Tone LLP, focuses on providing a comprehensive health insurance ecosystem through its mobile app and website.

For the quarter ending September 2024 (Q2FY25), the company posted a net profit of ₹13 crore, a significant improvement from the ₹8 crore net loss reported in the same quarter last year. Revenue for the quarter rose to ₹1,360 crore, compared to ₹992 crore in the previous year, showcasing robust growth.

The company’s shares made a promising debut on the stock exchanges on November 14, opening at ₹78.14 on the NSE, which was a 5.5% premium over the issue price of ₹74. Its ₹2,200 crore IPO, which was open from November 7 to November 11, received strong interest from investors, with bids for 31.13 crore shares against 16.3 crore shares offered, achieving a 1.9 times subscription.