Niva Bupa likely to see modest Dalal Street debut on November 14

Niva Bupa intends to utilise the net proceeds from the fresh issuance towards boosting its capital base to strengthen solvency levels, and a portion will be used for general corporate purposes.

Investors who received share allocations in Niva Bupa Health Insurance Company Ltd. may see muted listing gains as the company’s stock is set to debut on exchanges on November 14.

Analysts predict a subdued opening for the stock, citing weakened investor appetite for newly listed companies amidst prevailing market volatility and a tepid GMP in the unofficial market.

The initial public offer (IPO) of Niva Bupa, formerly known as Max Bupa Health Insurance Company, was subscribed 1.80 times at its close on Monday. The issue was priced in the band of Rs 70-74 per share.

Prathamesh Masdekar, Research Analyst at StoxBox, expects the stock to open near the upper end of the price band with stable performance prospects. "Niva Bupa is a prominent player in the health insurance sector, with innovative expansion plans and a technology-led, automated approach that supports profitability potential. We recommend that investors allotted shares hold them with a medium to long-term view," Masdekar said.

Niva Bupa IPO subscribed 1.8 times by Day 3, retail investors show strong interest

As one of India's leading health insurers, Niva Bupa provides a range of products and services aimed at easing customers’ healthcare journeys by integrating a comprehensive health ecosystem.

Narendra Solanki, an analyst at Anand Rathi, noted that the company’s valuation at the upper price band reflects a price-to-book value (P/BV) ratio of 6.1x, resulting in a market capitalisation of Rs 1,35,200 million post-issue. “The IPO appears fully priced, and we assign a ‘Subscribe – Long Term’ rating to the offering,” Solanki added.

According to platforms that track the grey market premium activities, the shares of the company are commanding a near flat GMP in the unofficial market.

The Rs 2,200-crore IPO comprises a fresh equity issue of Rs 800 crore and an offer-for-sale component of Rs 1,400 crore by promoters. The company downsized the issue from its original target of Rs 3,000 crore.

Proceeds from the fresh issuance will primarily strengthen Niva Bupa’s capital base to improve solvency levels, with a portion allocated for general corporate purposes. This IPO makes Niva Bupa the second standalone health insurer to go public after Star Health & Allied Insurance Company.

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