Niva Bupa Health Insurance, Paras Healthcare get SEBI approval to launch IPOs

Paras Healthcare IPO

Capital markets regulator SEBI, in its latest update, said it has issued observation letters on IPO papers filed by Niva Bupa Health Insurance Company, and Paras Healthcare, on October 18.

Niva Bupa had filed its draft red herring prospectus with the markets regulator on June 29 this year, and Paras Healthcare on July 31, to raise funds via initial share sale.

The issuance of observation letter means the company can go ahead with their IPO plans and raise funds from the capital markets.

Global private equity firm True North-backed Niva Bupa Health Insurance aims to raise Rs 3,000 crore through the initial public offering, which is a combination of fresh issuance of equity shares worth Rs 800 crore, and an offer-for-sale (OFS) of Rs 2,200 crore worth shares.

Promoter Bupa Singapore Holdings Pte will be selling shares worth Rs 320 crore and investor Fettle Tone LLP will sell shares worth Rs 1,880 crore through the OFS.

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Niva Bupa Health Insurance Company is a joint venture between the Bupa Group (the UK-based healthcare services expert) and Fettle Tone LLP.

As per the DRHP, Bupa Singapore Holdings Pte holds 62.27 percent stake in Niva Bupa, and the remaining shares are held by public shareholders including Fettle Tone LLP (with 27.86 percent stake).

The health insurance company is going to utilise fresh issue funds mainly for augmentation of its capital base to strengthen solvency levels, and the reminder for general corporate purposes.

Niva, if it lists, would be the fourth health insurance available for trading on the bourses after Star Health and Allied Insurance Company, ICICI Lombard General Insurance Company, and The New India Assurance Company.

ICICI Securities, Morgan Stanley India Company, Kotak Mahindra Capital Company, Axis Capital, HDFC Bank, and Motilal Oswal Investment Advisors are appointed as the book running lead managers to the issue.

Meanwhile, the initial share sale of Paras Healthcare, which is backed by global private equity firm Creador, comprises of fresh issue of Rs 400 crore, and an offer-for-sale of 1.49 crore equity shares.

Promoter Dharminder Kumar Nagar, and investor Commelina will be selling 29.28 lakh shares and 1.2 crore shares respectively in the offer-for-sale. Commelina had acquired a stake in July 2017.

Dharminder Kumar Nagar, and Commelina (an affiliate of Creador) own 75.32 percent, and 24.68 percent stakes respectively, in the Gurugram-based the healthcare provider.

Paras Healthcare, which operates eight hospitals under the Paras Health brand with 2,135 beds in five states and one union territory, will spend Rs 300 crore out of the fresh issue proceeds for repaying debt, and the remaining for general corporate purposes.

The merchant bankers handling the public issue of Paras are ICICI Securities, IIFL Securities, and Motilal Oswal Investment Advisors.