Shares of Niva Bupa Health Insurance Company Ltd gained 3.13% to Rs 86.45 on Wednesday after the insurer announced that it would not raise premiums following the GST Council’s decision to exempt life and health insurance from tax. The stock added Rs 2.62 from its previous close of Rs 83.83, trading within a day’s range of Rs 85.50 to Rs 91.20. The company’s market capitalization stands at Rs 15,660 crore.
Company statement on GST benefit
The GST Council, in its September 3 meeting, announced that individual life and health insurance premiums, as well as reinsurance costs, will no longer attract GST effective September 22.
Ankur Kharbanda, Executive Director at Niva Bupa Health Insurance, told CNBC-TV18 that the company does not plan to increase premiums for now. “The customer will get this benefit. It is an 18%—almost one-fifth of the premium—which the customer was paying earlier. Immediately we are not looking at anything which is giving on to the customer. We want to give this benefit to the customer. We don’t want to increase premium as of now,” he said.
Stock performance snapshot
Niva Bupa’s stock has a 52-week range of Rs 68.54 to Rs 109.34. It trades at a P/E ratio of 87.05 with an average trading volume of 2.21 million shares.
Impact on policyholders
With GST on health and life insurance now cut to zero, policyholders will no longer pay the earlier 18% tax on premiums. While the industry has raised concerns over input tax credit (ITC) loss, Niva Bupa confirmed that the immediate savings will be passed directly to customers.
