Niva Bupa Health Insurance IPO Lists At 6% Premium: Should You Hold, Sell or Buy?

Mumbai, November 14, 2024: Niva Bupa Health Insurance, the country's second standalone health insurer to float an Initial Public Offering (IPO), made a positive debut in the stock market on Thursday. The company's shares listed at a 6.08% premium at Rs 78.5 apiece on the Bombay Stock Exchange (BSE) against its issue price of Rs 74, before facing selling pressure and trading at Rs 76.1 apiece as of 10:38 am.

According to Shivani Nyati, Head of Wealth at Swastika Investmart Ltd, "Niva Bupa Health Insurance made a positive debut on the stock market. The performance was slightly better than expected." While considering holding their shares, Nyati advises investors to closely monitor the company's performance and broader market conditions, especially given concerns over short-term performance.

The IPO, which received moderately subscribed bids 1.9 times, reflects cautious investor sentiment, potentially influenced by recent negative quarterly earnings from Niva Bupa. Despite showing strong growth and a positive turnaround in recent years, the company's short-term concerns and the IPO's pricing seemed to have tempered enthusiasm.

For investors who participated in the IPO, Nyati recommends holding onto their shares with caution but advises waiting for a clearer picture of the company's future trajectory before investing if possible.

Here are the key details for Niva Bupa Health Insurance’s IPO:

• The healthcare insurance IPO is Rs 2,200 crore
• It includes Rs 800 crore from fresh equity issuance and an offer for sale (OFs) worth up to Rs 1,400 crore by promoters.
• The company has received bids of at Rs 31,13,62,800 shares against 17,28,57,143 shares offered during the closing day.
• Subscription categories saw Retail Individual Investors (RIIs) attracting a 2.73 times subscription rate, Qualified Institutional Buyers (QIBs) getting subscribed 2.06 times, and non-Institutional Investors reaching 68% of the total subscription.

The company plans to use net proceeds from fresh equity for bolstering its capital structure and strengthening solvency levels, with the remaining for general corporate purposes.

Niva Bupa Health Insurance stands as India’s second standalone health insurer after Star Health & Allied, the latter having completed an IPO in October.