Niva Bupa, Paras Healthcare get SEBI approval for IPOs

In a fresh development in the primary market, Niva Bupa Health Insurance Company and Paras Healthcare have received SEBI's go ahead to float their initial public offerings (IPOs), an update with the markets regulator showed. Global private equity firm True North-backed Niva Bupa Health Insurance had filed its Draft Red Herring Prospectus (DRHP) with the SEBI on June 29 this year, while hospital chain operator Paras Healthcare filed IPO papers with the capital market regulator on July 31 to raise funds by the public listing of its shares on the domestic bourses.

As per the DRHP, health insurer Niva Bupa Health Insurance Ltd (erstwhile Max Bupa) looks to raise ₹3,000 crore via IPO. The issue is a mix of fresh equity issuance of ₹800 crore and an offer for sale of 2,200 crore by existing shareholders. Under the OFS, Bupa Singapore Holdings Pte. Ltd plan to offload shares worth up to ₹320 crore, while Fettle Tone LLP. to sell shares worth up to ₹1,880 crore.

The company intends to utilise the net proceeds from the fresh issuance to the extent of Rs. 625 crore towards augmentation of its capital base to strengthen solvency levels and for general corporate purposes.

Niva Bupa is the second standalone health insurers (SAHI) to eye at the Indian bourses through IPO, after Star Health & Allied Insurance Company. Niva Bupa is India’s 3rd largest and 2nd fastest growing SAHI based on overall health (GDPI) of ₹5,499.43 crore in Fiscal 2024, growing at a CAGR of 41.37% from fiscal 2022 to 2024.

According to the Redseer report mentioned in the DRHP, Niva Bupa's market share in the Indian SAHI market was 16.24% for fiscals 2024, based on retail health GDPI.

From fiscal 2022 to fiscal 2024, Niva Bupa's overall gross written premium (GWP) increased at a CAGR of 41.27%, while its retail health GWP grew at a CAGR of 33.41%. The company's overall health GDPI growth of 41.37% during this period is one of the highest among SAHIs and nearly double the industry's average growth rate of 21.42%, as reported by Redseer.

As of March 31, 2024, it had 143,074 agents, 210 physical branches across 22 states and 4 union territories in India. It distributes products through 64 banks and other corporate agents, including major institutions like HDFC Bank and Axis Bank, according to the Redseer Report.

Paras Healthcare receives final SEBI observations

The IPO of the healthcare provider comprises a fresh issue of equity shares of up to ₹400 crore and an offer for sale (OFS) of up to 14,974,010 equity shares with face value of ₹1 each equity share. The total issue size is estimated to be in the range of ₹700-900 crore.

Under the OFS, 2,928,320 shares will be sold by the promoter Dharminder Kumar Nagar and up to 12,045,690 shares by investor Commelina (Creador).

The healthcare company plans to use capital raised from fresh equities for debt repayment, investment in subsidiaries, and general corporate purposes.

Paras Healthcare is the fifth largest healthcare provider in terms of bed capacity in North India, Bihar and Jharkhand among the peers, with an aggregate of 2,135 beds, as of March 31, 2024, as per CRISIL report. It operates eight hospitals under the “Paras Health” brand, which are spread across five states and one union territory in North India – Gurugram and Panchkula in Haryana; Patna and Darbhanga in Bihar; Kanpur, Uttar Pradesh; Udaipur, Rajasthan; Ranchi, Jharkhand and Srinagar in the union territory of Jammu and Kashmir. 

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