Niva Bupa plans to raise Rs 3,000 cr via IPO

The stock market is currently experiencing a record rally, prompting companies to take advantage by launching IPOs and entering the market. One such name is Niva Bupa, formerly known as Max Bupa Life Insurance, which has submitted a Draft Red Herring Prospectus (DRHP) to market regulator SEBI for its IPO. Upon receiving the green signal from SEBI on the IPO proposal, the company can launch it in the market.

According to the draft papers, Niva Bupa plans to raise Rs 3,000 crore through the IPO. The company intends to raise Rs 800 crore through fresh issuance of shares and the remaining Rs 2,000 crore through Offer For Sale (OFS), including selling shares by Bupa Singapore Holdings Pte and Fettle Tone LLP.

It is speculated that the company may consider raising up to Rs 160 crore through pre-IPO placements, which could potentially reduce the size of the fresh issue.

The funds raised from the IPO, approximately Rs 625 crore, are intended to strengthen the company’s capital base and enhance its solvency levels, with the remaining amount being used for general corporate purposes.

The IPO is expected to allocate 75% to Qualified Institutional Buyers (QIBs), 15% to Non-Institutional Bidders, and a maximum of 10% to Retail Investors.

As of now, the company has not disclosed the price band for its IPO. ICICI Securities, Morgan Stanley India, Kotak Mahindra Capital Company, Axis Capital, HDFC Bank, and Motilal Oswal Investment Advisors are the book-running lead managers for the Niva Bupa IPO, with KFin Technologies as the registrar.

Niva Bupa Health Insurance is a provider of health insurance products. The company’s total income was Rs 1,884.5 crore in FY21-22, which increased to approximately Rs 2,859.2 crore in FY22-23 and surged to Rs 4,118.6 crore in FY23-24. In FY22, the company incurred a loss of Rs 196.53 crore, followed by a profit of Rs 12.54 crore in FY23 and Rs 81.9 crore in FY24.

On July 3rd, the IPOs of Emcure Pharma and Bansal Wire are also scheduled. Emcure Pharma’s IPO price band ranges from Rs 960 to Rs 1,008, with a grey market premium (GMP) currently around Rs 295, suggesting a potential listing around Rs 1,303. Similarly, Bansal Wire’s IPO price band is Rs 243-256, with a current GMP of Rs 65.

Recently, SEBI has approved IPO proposals for companies like FirstCry and Unicommerce, paving the way for their market debut. FirstCry is preparing to raise approximately Rs 1,815 crore through its IPO, while Unicommerce plans to raise Rs 480-490 crore. Combined, these IPOs are expected to be around Rs 2,300 crore.

With numerous major IPOs such as Bajaj Housing Finance and Hyundai Motor India in the pipeline, investors looking to earn substantial returns in the coming days should be prepared.