Indian Health Insurer Niva Bupa Plans $360 Million IPO Amid Market Surge
According to the news agency Reuters Indian health insurer Niva Bupa is set to raise $360 million through an IPO, potentially valuing the company at up to $2.5 billion, according to sources and a document reviewed by Reuters. This move comes as the latest in a series of companies capitalizing on a surging stock market.
The British United Provident Association (Bupa), which owns a 63% stake in Niva Bupa, plans to sell a stake worth up to $38 million. Indian private equity firm True North is also planning to sell a stake worth up to $225 million, as detailed in the IPO documentation.
Niva Bupa is expected to file for IPO approval with India’s market regulator within the next week, sources said. Both Niva Bupa, Bupa U.K., and True North declined to comment on the matter.
This IPO highlights India’s booming market, where investors are increasingly pouring funds into various companies. Earlier this month, Korean auto giant Hyundai filed for what could become the country’s largest-ever IPO.
The $360 million offering will include $96 million raised through the issuance of new shares and $264 million from the sale of shares by existing investors. The funds will be used to bolster the company’s balance sheet and cover operating expenses, according to the document.
Niva Bupa has enlisted Morgan Stanley and Indian banks ICICI, Kotak, Axis, HDFC, and Motilal Oswal for the IPO. The banks did not respond to requests for comment.
India has one of the lowest insurance penetration rates among large countries, but adoption is rapidly increasing, driven by heightened risk awareness following the COVID-19 pandemic, as noted in Niva Bupa’s 2022 annual report. Rising healthcare costs have also fueled insurance sales, with many Indians relying on private healthcare due to overburdened government hospitals.
Niva Bupa has partnered with over 10,000 hospitals in India. Despite being one of the smaller players with a 1.8% market share in a sector led by Allianz and Generali ventures, Niva Bupa is poised for growth.
In 2021, India increased the cap on foreign ownership in local insurers from 49% to 74%. In 2023, the U.K.’s Bupa increased its stake in Niva Bupa to 63%.
Among other upcoming IPOs, electric-scooter maker Ola Electric, SoftBank-backed retailer FirstCry, and mortgage financier Bajaj Housing Finance are each looking to raise between $500 million and $1 billion.
