Niva Bupa Health Insurance jumped 11% on 23 April 2025 as Motilal Oswal Financial Services (MOFSL) initiated coverage on the stock with a positive view. The brokerage has a ‘Buy’ rating and a target of INR 100, which means 29% upside from INR 77.62.
The stock is not so old and went up to INR 86.46 on NSE intraday. As of 23 April 2025, Niva Bupa’s market cap is INR 15,403.66 crore.
What’s driving the optimism?
MOFSL says Niva Bupa Health has become one of the fastest growing standalone health insurer in India. The company has grown 34% CAGR in Gross Written Premium (GWP) in FY22 to FY25 and has highest incremental market share in retail health. Analysts now expect 25% CAGR in GWP and 32% CAGR in Profit After Tax (PAT) in FY25 to FY28.
MOFSL credits this robust outlook to the company’s strong brand equity, product innovation, and a highly diversified distribution model. The firm is seen benefiting from a well-rounded sales network: agents (30%), corporate agents (28%), brokers (29%), and direct channels (13%) contributed to the company’s distribution in the first nine months of FY25 (9MFY25).
Digital Push and Operational Efficiency
One of the key highlights of Niva Bupa Health is its digital push. The company has invested heavily in technologies across core areas like policy management, claims tracking and telemedicine services. This will lead to operational efficiency, cost control and scalable growth.
And to top it all, Niva Bupa Health has a claim settlement ratio of 90% in FY24, one of the highest among standalone health insurance companies. This is due to its transparent claims process and AI powered claim adjudication.
Global Backing and Strategic Leadership
A big part of Niva Bupa’s growth story is its strategic partnership with Bupa Group, a global healthcare leader based in the UK. Bupa with over 70 years of legacy and over 50 million customers across 190 countries brings in underwriting expertise and industry depth to the Indian venture.
The MOFSL report says Niva Bupa’s experienced leadership team along with Bupa’s global backing makes the company financially stronger and helps it to capitalize on future growth opportunities.
Valuation and Forecast
MOFSL values Niva Bupa Health at 40x FY27E P/E based on IFRS PAT, arriving at a target price of INR 100. This not only positions the stock among top gainers in the health insurance space but also makes it the first brokerage to put a triple-digit target on the stock, whereas previous estimates ranged between INR 75 and INR 90.
In terms of IFRS metrics, the brokerage expects insurance revenue and PAT to grow at a CAGR of 27% and 34%, respectively, over FY25 to FY28.
Niva Bupa Health Post-IPO Performance
Niva Bupa Health launched its IPO on 7 November 2024 with an issue size of INR 2,200 crore. The IPO was a mix of Fresh Issue (INR 800 crore) and OFS (INR 1,400 crore). The IPO was subscribed 1.80X and listed around the allotment price. However, the IPO performs well post-listing and reached an all-time high of INR 100 per share on 5 Dec 2024, reflecting a 35.13% return from its allotment price of INR 74 per share. Currently, it is trading around INR 85.70 per share (a correction of ~14%).
Final Word
Motilal Oswal verdict has rekindled interest in Niva Bupa Health at a time when India’s health insurance is growing big time. With strong fundamentals, tech implementation and global tie ups, the company is all set to continue the upmove. For those looking to get into healthcare insurance space, Niva Bupa could be the healthy pick. For more details related to IPO GMP, SEBI IPO Approval, and Live Subscription stay tuned to IPO Central.