The increase in healthcare insurance is evolving and growing with the population. Even the rise in inflation has an impact on health costs. The insurance coverages can cover the risk of spending their savings on health issues. Here we have Niva Bupa Health Insurance Company which is into the Health Insurance business and they are coming up with an IPO. Keep reading to learn about the company.
About Niva Bupa Health Insurance Company IPO
Niva Bupa Health Insurance Company India Limited is set to launch its Initial Public Offering (IPO) which consists of a fresh issuing of Rs. 800 crore and offer for sale of Rs. 1,400 crore totalling Rs. 2,200 crore. The IPO is done by companies to raise funds for their various corporate purposes and includes expansion and debt repayment.
The offer will be conducted through a book-building process and is scheduled to open on November 7, 2024, and close on November 11, 2024, and is expected to be listed on the bourses dated 14th November 2024.
About Niva Bupa Health Insurance GMP
The shares of Niva Bupa Health Insurance Company price in the grey market were trading at nil as of November 06th, 2024.
Overview and Business Model
Niva Bupa established itself as one of India’s largest and fastest-growing standalone health insurers (SAHI). The company focuses on the retail health market, which constitutes a significant portion of its business. Utilizing its ‘Niva Bupa Health’ mobile app and website, they offer a comprehensive health ecosystem that includes diagnostics, consultations, and policy management.
The company leverages data analytics for customer insights and employs a diverse distribution strategy involving direct sales and intermediaries to maximize reach. Their collaboration with the Bupa Group improves its capabilities, allowing it to reinvest profits into improving healthcare services for its customers.
Niva Bupa Health Insurance Financials
The company’s revenue stood at Rs. 4,118.63 crore in FY24, a 44.04% growth from Rs. 2,859.24 crore in FY23. Net Profits stood at Rs. 81.85 crore in FY24 which is an increase of 552.71% from Rs. 12.54 crore a year ago.
The return on net worth in FY24 stood at 5.68%, which has increased from 1.87% from a year ago. There was a slight reduction in debt, as their ratio in FY24 stood at 0.12 times improved from 0.30 times in FY23. The solvency ratio at 2.55 times, Combined ratio stood at 99%. The Net retention ratio was 79% in FY24.
Niva Bupa Health Insurance vs. Peers
In RHP, the Company has mentioned Star Health and Allied Insurance Company Limited, ICICI Lombard General Insurance Company Limited, and The New India Assurance Company Limited. Compared to its peers, Niva Bupa is smaller based on Net profit. The RoE of ICICI Lombard was higher among its peers and lower in New India Assurance.
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Strengths of Niva Bupa Health Insurance
- The retail health insurer with a focus on delivering robust Gross Written Premium growth, capital efficiency, and profitability.
- Customer-centric approach while driving customer experience and ensuring retention.
- The company leverages technology to automate workflow and to provide services to customers.
- The brand value of Bupa’s parentage and association with health insurance has an impact on the company.
- Niva Bupa’s Domain Knowledge and Experience in Claims have helped the company to gain more brand value with a 91.93% settlement ratio in FY24.
Risks to Niva Bupa Health Insurance
- The company is dependent on intermediated distribution channels, particularly individual agents, corporate agents, and brokers.
- Niva Bupa incurred losses in FY22 and the three months ended June 30, 2024, and June 30, 2023. Based on underwriting the profitability can fluctuate.
- The company had a solvency ratio of 2.55 times in FY24 and improved from 1.67 times in FY23 which is near the IRDAI limit of 1.5 times. Any reduction can affect the company’s financials.
- Niva operates in a highly competitive market and product pricing is dependent on demand in the evolving and rapidly changing industry.
- The company is dependent on Network Hospitals, and relations need to be maintained or else there is a risk of not offering cashless claims to Niva’s customers by Hospitals.
Niva Bupa Health Insurance Promoter
The promoters of Niva Bupa Health Insurance Company are Bupa Singapore Holdings Pte. Ltd., Fettle Tone LLP, and Bupa Investments Overseas Limited. They play a crucial role in the company’s direction and management.
Niva Bupa Health Insurance Selling Shareholders
The selling shareholders in the IPO include Bupa Singapore Holdings Pte. Ltd offering 1,06,99,87,767 equity shares with a weighted average acquisition cost of Rs. 34.88 per equity share and Fettle Tone LLP Offering 46,10,20,811 equity shares with a weighted average acquisition cost of Rs. 15.57 per equity share.
Niva Bupa Health Insurance Lead Managers
The 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 Private Limited is the Registrar of the offer. They are responsible for managing the entire IPO process which includes pricing, marketing, and ensuring compliance with regulatory requirements.
Niva Bupa Health Insurance IPO’s Objectives of Offer
The objective of the fresh issue is to increase the capital base to maintain and strengthen the solvency levels of the company- Rs. 800 crore.
Written by – Santhosh S
Disclaimer
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