The Indian financial landscape is witnessing a surge in initial public offerings (IPOs), with notable approvals from the Securities and Exchange Board of India (SEBI) for two prominent players: Niva Bupa Health Insurance and Paras Healthcare.
Niva Bupa Health Insurance IPO Overview
Private equity firm True North-led Niva Bupa Health Insurance Ltd (formerly Max Bupa) has received final approval from SEBI for its ₹3,000 crore IPO. The company had filed its IPO papers with SEBI on June 29, 2024. The offering will consist of a fresh issuance of equity shares worth ₹800 crore and an offer for sale (OFS) of up to ₹2,200 crore. Bupa Singapore Holdings Pte. Ltd. will offer ₹320 crore, and Fettle Tone LLP will offer ₹1,880 crore through the OFS.
Niva Bupa plans to use ₹625 crore of the proceeds from the fresh issuance to strengthen its capital base and improve its solvency levels, with the remainder allocated for general corporate purposes.
Key Details About Niva Bupa:
- Gross Direct Written Premium (GDPI) in Fiscal 2024: ₹5,499.43 crore.
- Market Share: 16.24% in India’s standalone health insurance (SAHI) sector.
- Rank: 3rd largest and 2nd fastest-growing SAHI in India based on GDPI.
- Growth: The company has seen a compound annual growth rate (CAGR) of 41.37% in health GDPI between FY22 and FY24, nearly double the industry’s average of 21.42%.
Niva Bupa adopts a “digital-first” approach, leveraging machine learning-based algorithms and logistic regression models to identify fraudulent claims, driving higher success rates in fraud detection while minimizing the impact on customer experience. The company reported strong customer service metrics, with a 91.93% claims settlement ratio in FY24 and 81.5% of pre-authorized cashless claims approved in less than 30 minutes. Additionally, Niva Bupa operates with a large distribution network, featuring 143,074 agents and 210 physical branches across 22 states and union territories, along with key partnerships with 64 banks including HDFC Bank and Axis Bank.
Paras Healthcare IPO Overview
Paras Healthcare, a leading hospital chain focused on Tier 2 and Tier 3 cities in North India, has also received SEBI’s approval for an IPO estimated to be worth ₹1,000 crore. This offering will include a fresh issue of equity shares valued at ₹400 crore and an OFS of approximately ₹600 crore by existing stakeholders. The proceeds are intended for debt repayment and expansion plans as the company aims to increase its bed capacity significantly.
Market Impact
Both companies are poised to benefit from the growing demand for healthcare services in India, especially as awareness around health insurance rises post-pandemic. As they prepare for market entry, Niva Bupa and Paras Healthcare are set to play pivotal roles in shaping the future of health services in the country.
Disclaimer: This article is for informational purposes only and should not be construed as financial or investment advice. Always seek professional guidance before making any investment decisions.
