Niva Bupa shares make positive debut on bourses; list at 6% premium

Niva Bupa Shares Listing: Niva Bupa Health Insurance Company shares made a positive debut on D-Street on Wednesday. On the BSE, Niva Bupa Health Insurance shares listed at Rs 78.50, reflecting a premium of Rs 4.50 or 6.08 per cent from its IPO allotment price of Rs 74.

 

Similarly, on the National Stock Exchange (NSE), Niva Bupa Health Insurance shares listed at Rs 78.14, up Rs 4.14 or 5.59 per cent from its IPO allotment price.

 

This defied grey market trends, as unlisted shares of Niva Bupa Health Insurance were quoted trading at Rs 75, showing a grey market premium of Re 1 or 1.35 per cent from the issue price ahead of listing, revealed sources tracking grey market activities. 

This listing performance was slightly better than expected, said Shivani Nyati, head of wealth at Swastika Investmart, adding, "The IPO, which was moderately subscribed at 1.9 times, reflected cautious investor sentiment, potentially influenced by the company's recent negative quarterly earnings."

 

While Niva Bupa has shown strong growth and a positive turnaround in recent years, Nyati noted that short-term performance concerns and the IPO's pricing seemed to have tempered investor enthusiasm. For the investors who participated in the IPO, Nyati suggested they could consider holding their shares but should closely monitor the company's performance and broader market conditions. "New investors may want to wait for a clearer picture of the company's future trajectory before investing," she said. 

Prashanth Tapse, senior VP (Research) at Mehta Equities, said that the Niva Bupa listing was in line with his expectations considering subscription demand and subdued market sentiments. According to him, investors believe that Niva Bupa is strategically positioned to capitalize on India's growing health insurance market. The growing consumer awareness, constant rise in medical inflation, and demand for quality healthcare would benefit the company's business growth going forward. Tapse also believes that the under-penetration of health insurance and the rising middle class can sustain future growth for companies, and the strong parent backing has helped the company position itself to grow faster in the sector.

 

"Considering all the parameters, we continue to recommend allotted investors to hold it for the long term despite knowing short-term volatility in the markets and competitive pressures in the sector," he said. For non-allottees, Tapse advised accumulating if the listing is around the issue price and buying more on dips for the long term only.

   

The Niva Bupa Health Insurance Company IPO consisted of a fresh issue of 108,108,108 shares and an offer for sale of 189,189,189 shares with a face value of Rs 10 apiece. It was available at a price band of Rs 70-74 per share and a lot size of 200 shares. The IPO closed for subscription on Monday, November 11, 2024, and was oversubscribed by 1.80 times, driven by Retail Individual Investors (RIIs), who placed subscriptions of 2.73 times, followed by Qualified Institutional Buyers (QIBs) at 2.06 times, and Non-Institutional Investors (NIIs) at 0.68 times, as per NSE data.

 

The basis of allotment for Niva Bupa Health Insurance Company IPO shares was finalised on Tuesday, November 12, 2024.

 

The company plans to utilise the net proceeds from the fresh issue, as per IRDAI regulations, to augment its capital base, maintain and strengthen solvency levels, and invest in instruments as prescribed under the IRDAI (Actuarial, Finance and Investment Functions of Insurers) Regulations, 2024 (IRDAI AFIF Regulations). The proceeds will also be used for general corporate purposes.

 

Kfin Technologies is the registrar for the Niva Bupa IPO. Morgan Stanley India Company, ICICI Securities, Kotak Mahindra Capital Company, Axis Capital, HDFC Bank, and Motilal Oswal Investment Advisors are the book-running lead managers.

 

Niva Bupa Health Insurance Company, a joint venture between Bupa Group and Fettle Tone LLP, is India's premier health insurance provider. It offers comprehensive coverage and seamless access to quality healthcare services, supporting customers throughout their healthcare journeys and providing access to an extensive health ecosystem.