Health Insurer Niva Bupa's Shares End Flat Against IPO Price

Following the stock market debut on Thursday, shares of Niva Bupa Health Insurance Co. settled at Rs 74 apiece on the BSE, which was flat against the issue price. On the National Stock Exchange, the stock closed at Rs 74.01 per share.

Earlier in the day, the scrip listed at a premium of 6.08% and 5.59% on the BSE and NSE, respectively.

The health insurer raised up to Rs 2,200 crore in its maiden issue which was subscribed 1.8 times on the third day of bidding, led by demand from retail investors.

Qualified institutional buyers subscribed 2.06 times, non-institutional investors bid 0.68 times, and retail investors subscribed 2.73 times in their IPO allotment.

The IPO was a fresh issue of shares worth Rs 800 crore, and an offer-for-sale of up to Rs 1,400 crore, according to the red herring prospectus filed with the Securities and Exchange Board of India.

The issue size set for the IPO is lower than the Rs 3,000 crore it filed in its draft red herring prospectus. The IPO size was trimmed when the largest selling shareholder—True North—decided to eventually downsize how much they were selling, said Krishnan Ramachandran, managing director and chief executive officer at Niva Bupa.

Post the issue, solvency will go up, according to Ramachandran. To some extent, the company will be over-capitalised, but the idea is to take care of future growth requirements, he told NDTV Profit.

Promoter Bupa Singapore Holdings Pte. offloaded shares worth Rs 350 crore, while Fettle Tone LLP will sell stake to the tune of Rs 1,050 crore.

ICICI Securities Ltd., Morgan Stanley India Co., Kotak Mahindra Capital Co., Axis Capital Ltd., HDFC Bank Ltd., and Motilal Oswal Investment Advisors Ltd. were the book-running lead managers for the IPO.

Founded in 2008, Bupa was a founding shareholder of the insurance giant. Later, True North became Niva Bupa's majority shareholder in 2019 by acquiring a stake for Rs 511 crore.

Niva Bupa Health Insurance, formerly known as Max Bupa Health Insurance Co., is a joint venture between Fettle Tone LLP—a special purpose vehicle of True North Fund VI LLP—and UK-based healthcare services expert, Bupa.