Niva Bupa Health Insurance IPO: SEBI Approves ₹3,000 Crore Offering

True North, which will hold Niva Bupa Health Insurance Ltd, a brand till recently Max Bupa, has been provided with the final greenflag from the SEBI in making an initial public offering (IPO) of ₹ 3,000 crore.

Niva Bupa had filed its IPO documents with SEBI on June 29, 2024. It intends to raise ₹800 crore through a fresh issue and offer for sale, of which ₹320 crore will come from Bupa Singapore Holdings Pte. Ltd and ₹1,880 crore from Fettle Tone LLP, through an issue at face value of ₹10 per share.

Under the OFS, Fettle Tone LLP will sell shares worth ₹1,880 crore, while the promoter Bupa Singapore Holdings Pte Ltd will sell shares worth ₹320 crore. Niva Bupa is currently mainly held by an international healthcare provider based out of the UK, namely Bupa. Bupa Singapore Holdings Pte has a 62.27% stake, and Fettle Tone LLP has a 27.86% stake.

The proceeds from the fresh issuance, at up to ₹625 crore, will be used to strengthen the capital base and enhance the solvency levels of Niva Bupa, besides their general corporate purposes.

Book-running lead managers for the IPO are ICICI Securities Limited, Morgan Stanley India Company Private Limited, Kotak Mahindra Capital Company Limited, Axis Capital Limited, HDFC Bank Limited, and Motilal Oswal Investment Advisors Limited. KFin Technologies Limited has been appointed as the registrar.

With Niva Bupa going public, it will make it India's second standalone health insurer to hit the market. The other is Star Health & Allied Insurance Company.

About the company

The health insurance company, Niva Bupa Health Insurance Company Limited, is one of India's largest and fastest-growing standalone health insurers, generating a Gross Direct Written Premium (GDPI) at ₹5,499.43 crore for Fiscal 2024. The Company's mission is to make everyone in India confident to be able to access the best healthcare, through a plethora of health insurance products that promise to support the customer with access to a vast ecosystem of health. Niva Bupa embraces a "digital-first" strategy through technology across onboarding and underwriting operations, as well as claims processing and renewals, to enhance the customer experience.

Niva Bupa has secured a 16.24% share of the Indian SAHI market in Fiscal 2024 based on retail health GDPI. Also, it is the third-largest and second-fastest-growing SAHI in India. Its Overall Health GDPI stood at ₹5,494.3 crore in Fiscal 2024. Its growth rate in the period from Fiscal 2022 to 2024 has been 41.37% CAGR.

Niva Bupa uses advanced machine learning algorithms and logistic regression models in improving the detection of fraudulent claims to ensure that a lesser number of investigation referrals result from such, thereby creating minimum inconvenience to customers.

Niva Bupa, as of March 31, 2024, operated 210 branches in 22 states and 4 union territories, assisted by 143,074 agents. The company has distribution agreements with 64 banks and corporate agents, including HDFC Bank and Axis Bank as some of the key partners. Niva Bupa has done well in services in Fiscal 2024 with a claims settlement ratio of 91.93%. Of the pre-authorised cashless claims, 81.50% were settled within 30 minutes—the highest rate of pre-authorised claims processed within one hour, says Redseer.

From Fiscal 2022 to 2024, Niva Bupa's total Gross Written Premium grew at a CAGR of 41.27%. In the same period, the retail health GWP has grown at 33.41% CAGR. This overall GDPI growth of 41.37% nearly doubles the SAHI industry average of 21.42% for the same period and thereby indicates Niva Bupa's strong position in the market.