Temasek, Warburg, CPPIB keen to invest in Niva Bupa

Temasek Holdings, Warburg Pincus and Canada Pension Plan Investment Board (CPPIB) are keen to participate in Niva Bupa Health Insurance Ltd’s upcoming $100 million fundraising, two people aware of the development said.

The True North-backed health insurer expects a valuation of $2 billion for the pre-ipo capital raising, the people cited above said on the condition of anonymity.

The prospective investors are already conducting due diligence on the company, one of the two people said, requesting anonymity.

“The bids are due on April 10,” the second person said.

True North may also sell some of its stake as the company wants to realign the capitalization table ahead of the IPO, the third person aware of the deal details said. Other than Temasek, Warburg and CPPIB, some public market investors also have expressed interest, the third person said, but declined to identify them.

According to the second person, the company expects to go public in two to three years.

Spokespeople for True North, Warburg Pincus and Niva Bupa did not respond to requests for comment. Spokespeople for Temasek and CPPIB declined to comment.

Niva Bupa is a joint venture between private equity firm True North and Bupa Singapore holdings, backed by British United Provident Association Ltd (Bupa). True North acquired a 55.6% stake in the insurance company from Max India Ltd in 2019 through its special purpose vehicle Fettle Tone for ₹510 crore. Bupa owns the balance stake in the venture.

In March 2021, Axis Bank acquired 9.9% of Fettle Tone for ₹90.8 crore, according to regulatory filings.

The insurer reported a 60% increase in gross written premium of ₹2,810 crore in FY22 from the previous year, the company said in its annual report. Its underwriting loss widened to ₹313.93 crore in FY22 from ₹107.71 crore in the previous year. Net loss for FY22 rose to ₹196.53 crore compared with ₹49.74 crore in the previous year.

“The promoters have been supporting the company in the form of regular equity infusions as evident by an equity infusion of ₹145 crore in FY2020, ₹280 crore in FY2021, and ₹125.1 crore in 9MFY22,” a Care Ratings report from March 2022 said.

THE HEALTH INSURER BACKED BY TRUE NORTH SEES A VALUATION OF $2 BN IN THE PRE-IPO CAPITAL RAISING ROUND