Niva Bupa IPO: 0.71x Subscription and Mixed Market Sentiment
Niva Bupa’s IPO, which opened on November 7, 2024, has seen a 0.71x subscription as of Day 2, with Retail Individual Investors fully subscribing to their portion. The IPO aims to raise ₹2,200 crore, but analysts have mixed views due to its aggressive valuation and recent negative earnings. The subscription window closes on November 11, 2024, with shares expected to list on November 14, 2024.
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Niva Bupa IPO: 0.71x Subscription and Mixed Market Sentiment
Niva Bupa IPO, subscription, growth
Niva Bupa IPO: 0.71x Subscription and Mixed Market The Niva Bupa Health Insurance IPO, which opened for subscription on November 7, 2024, aims to raise ₹2,200 crore with a price band of ₹70-74 per share. The IPO has garnered a positive response, being subscribed 1.17 times by the second day, with retail investors showing significant interest, subscribing 1.34 times. The Qualified Institutional Buyers (QIB) segment is subscribed 1.50 times, while the Non-Institutional Investors (NII) category has reached 40%.
Niva Bupa has shown strong growth, with a 37.68% rise in Gross Written Premium (GWP) and a significant increase in profit to ₹81.85 crore in FY 2024, compared to ₹12.54 crore the previous year. Despite this, analysts caution that the IPO is priced aggressively, especially given its high Price-to-Earnings (P/E) ratio of 642.22 based on FY24 earnings. Some brokerages suggest subscribing for long-term investment, while others advise only high-risk investors to apply due to the company’s aggressive pricing and recent negative earnings.
The IPO includes ₹800 crore from fresh equity issuance and ₹1,400 crore from an Offer for Sale (OFS) by existing stakeholders. Niva Bupa intends to use the proceeds to strengthen its capital base and enhance solvency. The IPO has no significant grey market premium, indicating no major price movements above the issue price.
Niva Bupa IPO, mixed response
Niva Bupa IPO: 0.71x Subscription and Mixed Market Niva Bupa Health Insurance’s initial public offering (IPO) has garnered a mixed response as of Day 2 of the subscription period. The IPO opened on November 7, 2024, with a price range of Rs 70-74 per share and a lot size of 200 shares. By November 8, 2024, the subscription stood at 0.71 times, with Retail Individual Investors (RIIs) fully subscribing to their portion. Qualified Institutional Buyers (QIBs) subscribed 0.79 times, and Non-Institutional Investors (NIIs) at 0.35 times. However, the grey market premium (GMP) remains flat, signaling a neutral sentiment.
The subscription window will close on November 11, 2024, and shares are expected to be listed on the BSE and NSE on November 14, 2024. The IPO aims to raise Rs 2,200 crore, with Rs 990 crore already raised from anchor investors.
Analysts have mixed views on the IPO. Some, like Anand Rathi Research, recommend subscribing for the long term, citing the company’s potential in India’s growing health insurance market. Others, such as Swastika Investmart and Bajaj Broking, caution that the valuation may be aggressive, with some pointing to the company’s negative earnings in the first quarter of FY24. Despite this, Niva Bupa is seen as a leader in the sector, offering a range of health insurance products and services aimed at creating a customer-focused health ecosystem.
Overall, while the IPO offers a chance to invest in a growing market, some caution may be warranted due to the company’s recent performance and the pricing of the offering.
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