Niva Bupa Health Insurance Ltd (erstwhile Max Bupa) has filed its draft red herring prospectus (DRHP) with capital market regulator Securities and Exchange Board of India (SEBI) to mop up funds through an initial public offering (IPO).
The IPO with a face value of ?10 each is a mix of fresh issuance of Rs 800 crore and an offer for sale of up to Rs 2,200 crore by Promoter and Investor Selling Shareholders.
The offer for sale consists of up to Rs 320 crore by Bupa Singapore Holdings Pte. Ltd., and up to Rs 1880 crore by Fettle Tone LLP.
The company, in consultation with the book-running lead manager, may consider an issue of specified securities up to Rs 160 crore as a "pre-IPO placement". If such placement is completed, the fresh issue size will be reduced.
The Offer is being made through the Book Building Process, wherein not less than 75% of the Offer shall be available for allocation on a proportionate basis to Qualified Institutional Buyers, not more than 15% of the Offer shall be available for allocation to Non-Institutional Bidders and not more than 10% of the Offer shall be available for allocation to Retail Individual Bidders.
The company intends to utilize the Net Proceeds from the Fresh Issuance to the extent of Rs. 625 towards augmentation of our capital base to strengthen solvency levels and for general corporate purposes.
Niva Bupa Health Insurance Company Limited is one of India's largest and fastest growing standalone retail health insurer (SAHI) in India, with a Gross Direct Written Premium (GDPI) of ?5,499.43 crore in Fiscal 2024. Its market share in the Indian SAHI market was 16.24% for Fiscal 2024, based on retail health GDPI and aims to "give every Indian the confidence to access the best healthcare" through their health insurance products and services that enable customers to navigate their healthcare journey, by providing them access to a holistic health ecosystem. As of March 31, 2024 Niva Bupa has insured 14.73 million lives.
According to the Redseer report, Niva Bupa's overall direct sales channel was the highest amongst SAHIs in terms of total health GDPI contribution in Fiscal 2024, highlighting the strength of its in-house sales capabilities through its website, "Niva Bupa Health" mobile application and sales team. It is the largest selling non-life insurer on India's largest online insurance broker/ web aggregator, Policybazaar.com
Its GWP from direct sales online channel, which increased to ?7,329.77 million in Fiscal 2024 from ?5,276.79 million in Fiscal 2022, through continued investments in search engine optimization and marketing on our online platform as well as building hyper-personalized and event-based digital marketing capabilities
The health insurer has a diversified channel mix with corporate agents (banks and others), individual agents and broker channels contributing 27.25%, 32.07% and 27.04% respectively of their business by GDPI for Fiscal 2024 respectively, as compared to over 50% contribution of the individual agents channel to overall GDPI of SAHIs in Fiscal 2024
A Great Place to work certified company, Niva Bupa is the second standalone health insurer (SAHI) to eye at the Indian bourses through IPO, after Star Health & Allied Insurance Company and in India it is the 3rd largest and 2nd fastest growing SAHI based on Overall Health GDPI of INR 54.94 Bn in Fiscal 2024, which grew at a CAGR of 41.37% from Fiscal 2022 to 2024
Niva Bupa with Bupa Singapore Holdings Pte. Ltd. and Bupa Investments Overseas Limited as promoters of Niva Bupa, is the only health insurance company in India majority controlled by a foreign global healthcare group. Established in 1947, Bupa is an international healthcare organisation serving over 50 million customers worldwide, as of 31 December 2023.
As of March 31, 2024 with over 143,074 agents Niva Bupa has 210 physical branches across 22 states and 4 union territories in India. It distributes products through 64 banks and other corporate agents, including major institutions like HDFC Bank and Axis Bank, according to the Redseer Report. In addition to it, Niva Bupa has delivered strong customer service metrics on claims with a 91.93% claims settlement ratio for Fiscal 2024 and 81.50% of pre-authorized cashless claims were approved in less than 30 minutes in Fiscal 2024, and it has the highest percentage of pre-authorized claims processed within 1 hour among all SAHIs, as per the Redseer Report.
The company has expanded its network of hospitals from 8,562 in March 2022 to 10,460 by March 2024, with one of the largest networks providing cashless treatment. Among these, 326 are Preferred Partner Network (PPN) Hospitals, offering additional benefits such as free ambulance services, designated relationship managers, and discounts on pharmacy, diagnostics, and consultations even after discharge.
From Fiscal 2022 to Fiscal 2024, Niva Bupa's overall GWP increased at a compound annual growth rate (CAGR) of 41.27%, while its retail health GWP grew at a CAGR of 33.41%. The company's overall health GDPI growth of 41.37% during this period is one of the highest among SAHIs and nearly double the industry's average growth rate of 21.42%, as reported by Redseer.
Niva Bupa's Gross Written Premium (GWP) increased by 37.68% from ?4,073.03 crore in Fiscal 2023 to ?5,607.57 crore in Fiscal 2024, primarily due to growth in GWP from its health line of business, which includes GWP from its personal accident line of business and GWP from our travel line of business. Profit after tax increased by 552.73% from ?12.54 crore in Fiscal 2023 to ?81.85 crore in Fiscal 2024.
For Fiscals 2024, 2023 and 2022, Niva Bupa has delivered a Combined Ratio of 98.76%, 97.13% and 107.41%, respectively.
The company has also achieved an increase in AUM to ?54,582.31 million for Fiscal 2024 from ?24,013.15 million for Fiscal 2022 and investment yield, which increased to 7.1% for Fiscal 2024, from 6.6% for Fiscal 2022.
As per the DRHP, the health insurance exhibited the highest growth with CAGR of 19.5% between Fiscals 2018 to Fiscal 2024, surpassing the overall non-life insurance market's growth of CAGR of 11.5% over the same period. The retail health insurance segment is the most promising segment in the health insurance industry in India as of March 31, 2024, due to higher average premium per life, higher renewal rates and lower combined ratios as compared to group health insurance, and SAHIs lead the retail health insurance with a market share of 56% in Fiscal 2024, according to the Redseer Report.
ICICI Securities Limited, Morgan Stanley India Company Limited, Kotak Mahindra Capital Company Limited, Axis Capital Limited, HDFC Bank Limited and Motilal Oswal Investment Advisors Limited are the book-running lead managers and KFin Technologies Limited is the registrar of the offer. The equity shares are proposed to be listed on BSE and NSE. |
