The Niva Bupa Health Insurance IPO listing is scheduled in a few hours but the GMP down to mere 1% premium to issue price. The issue has been subscribed 1.90 times overall with the retail segment around 2.88 times. This along with the subdued GMP indicates that investor confidence in the IPO is not at its peak. The price band at Rs 70-74 per share is seen as aggressive by many market observers. This is considered to be a key reason for the subdued grey market premium.
The Niva Bupa Health Insurance IPO is a book built issue with a combination of fresh issue worth 10.81 crore shares totalling to Rs 800.00 crores and Rs 1400 crore offer for sale of 18.92 crore shares. The total issue size is of Rs 2,200.00 crores.
Niva Bupa IPO: JM Financial worried about industry growth prospects
The general insurance industry grow 27.6% YoY in October after a 6.5% YoY contraction in September. But JM Financial highlights that this “growth is led by crop business as three players, Bajaj Allianz, National Insurance and AIC (Agricultural Insurance Corporation), reported 100%+ YoY growth. This follows from September, wherein crop business contracted 24% YoY, in a seasonally strong month, where it had contributed to 25% of Sep’23 premiums.”
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They explained that if they excluded this then growth for the insurance industry is around “If we exclude these three, industry growth normalizes to “9.0% YoY, a weak showing, especially as SAHIs continued their strong growth with a 25.1% YoY print. ICICIGI and Go Digit reported weak YoY growth of 7.5% and 7.8%, respectively. YTD growth stands at 14.3%/10.9%, gaining 35/2bps private market share YTD. Amongst SAHIs, Star disappointed with a weak 13.8% growth while Niva Bupa and Care reported 30%+ growth. Aditya Birla Health emerged as the growth leader with a 55% YoY growth, reaching a strong 41% YTD, as it focuses on growth in FY25. Commercial lines, led by flat premiums YoY in fire segment, has been weak this year. Motor and retail health had seen YTD growth of 9%/18.2% in H1.”
Overall according to the brokerage house the growth outlook is something they will wait and watch for the health insurance segment.
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