Health insurer Health Insurance Company Ltd and Ltd, which runs the hospital chain under the ‘Paras Health’ brand, have received Securities and Exchange Board of India (Sebi) go ahead to raise funds through Initial Public Offerings (IPOs), an update with the markets regulator showed on Monday.
Niva Bupa Health Insurance Company is looking to garner Rs 3,000 crore through an initial share sale involving fresh issuance of equity shares and Offer for Sale (OFS) component. Paras Healthcare is aiming to raise Rs 400 crore through fresh issuance of equity shares, besides there is an OFS component.
The two companies, which filed their draft IPO papers with Sebi during July-August, obtained its observations on October 18, the update showed.
In Sebi’s parlance, obtaining observation means its go ahead to float the public issues.
The equity shares of both companies proposed to be listed on the BSE and NSE.
Going by the draft papers, the proposed IPO of Niva Bupa Health Insurance Company Ltd, formerly Max Bupa Health Insurance Company, is a combination of fresh issuance of equity shares worth Rs 800 crore and OFS of shares valued Rs 2,200 crore by a promoter and an investor shareholder.
Under the OFS, investor Fettle Tone will sell shares to the tune of Rs 880 crore and promoter Bupa Singapore Holdings will offload shares valued Rs 320 crore.
Niva Bupa is majorly controlled by Bupa, an international healthcare company headquartered in the UK. At present, Bupa Singapore Holdings Pte owns 62.27% stake while Fettle Tone holds 27.86% stake in the insurance firm.
The company intends to utilise the net proceeds from the fresh issuance to the extent of Rs 625 crore towards boosting its capital base to strengthen solvency levels, besides a portion will be used for general corporate purposes.
This will be the second standalone health insurer looking to float an IPO, after Star Health & Allied Insurance Company.
Paras Healthcare’s proposed IPO is a mix of fresh issue of equity shares of aggregating up to Rs 400 crore and an OFS of up to 1.5 crore shares by a promoter and an investor shareholder, according to the Draft Red Herring Prospectus (DRHP).
Under the OFS, promoter Dharminder Kumar Nagar will offload 29.28 lakh equity shares and investor Commelina will divest 1.2 crore shares.
Paras Healthcare proposes to utilise the proceeds from the fresh issue for payment of debt; investment in subsidiaries – Paras Healthcare (Ranchi) Private Ltd and Plus Medicare Hospitals Private Limited – in the form of debt or equity for payment of borrowings and for general corporate purposes.
The company runs eight hospitals under the ’Paras Health’ brand, which are spread across five states and one union territory – Gurugram and Panchkula in Haryana; Patna and Darbhanga in Bihar; Kanpur in Uttar Pradesh; Udaipur in Rajasthan; Ranchi in, Jharkhand and Srinagar in Jammu and Kashmir – with an aggregate bed capacity of 2,135 beds as of March 2024.
