Of the total $360m offering, Niva Bupa intends to generate $96m through the issuance of new shares. Credit: izzuanroslan/Shutterstock.

Niva Bupa, an India-based health insurer, is reportedly gearing up to raise $360m (Rs3bn) through an initial public offering (IPO), potentially valuing the company at approximately $2.5bn.  

This move comes amidst a surge in the stock market, with the company looking to capitalise on the flourishing IPO climate in India, Reuters reported.  

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The report noted that British United Provident Association (Bupa), which holds a 63% stake in Niva Bupa, is set to sell a stake valued at up to $38m.  

Additionally, the Indian private equity company True North aims to offload shares worth up to $225m, as per IPO details. 

The company is expected to file for IPO approval with India’s market regulator within the next week, sources have informed. 

However, Niva Bupa, along with Bupa UK and True North, have declined Reuters’ request for a comment on the matter. 

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Of the total $360m offering, Niva Bupa intends to generate $96m through the issuance of new shares.  

The remaining $264m will come from the sale of shares held by current investors. 

The funds raised from the IPO are earmarked for bolstering Niva Bupa’s balance sheet and covering operational expenses.  

Reuters noted that Morgan Stanley, along with Indian banks such as Kotak, Axis, ICICI, HDFC, and Motilal Oswal, have been appointed for the IPO, although they have not commented on the development. 

India, despite having one of the lowest insurance penetration rates among large nations, is witnessing rapid growth in insurance adoption, particularly post-Covid, which has heightened risk awareness, as stated in Niva Bupa’s 2022 annual report. 

At present, Niva Bupa has established partnerships with over 10,000 hospitals across the country.  

Nevertheless, it remains a smaller entity in the insurance market, with a 1.8% market share, in a sector led by larger insurance ventures such as Allianz and Generali.