Portfolio News

Niva Bupa sells controlling stake to JV partner Bupa and raises Rs. 800 crore

As published in moneycontrol on Oct 12, 2023

Niva Bupa Health Insurance, which is backed by Bupa and home-grown private equity firm True North, is all set to welcome new investors who have committed to collectively invest around Rs 800 crore in the company for a minority stake, subject to regulatory approval, the leading standalone health insurance firm disclosed in an official statement.

The investors include India Business Excellence Fund IV [Motilal Oswal Alternate Investment Advisors, a subsidiary of Motilal Oswal Financial Services], Temasek and Paragon Partners Growth Fund II, amongst others.

Moneycontrol was the first to name the consortium of investors for the additional Niva Bupa capital raise in a newsbreak dated September 30.

Speaking on the development, Krishnan Ramachandran, MD & CEO of Niva Bupa Health Insurance said: “India offers tremendous growth opportunity for the health insurance industry. Our existing joint venture partners, along with the new set of investors who are coming on board, are excited about the market potential and are committed to working with us to democratize health insurance in India.”

Divya Sehgal, Partner, True North said, “Niva Bupa has experienced significant growth in recent years. This growth is a result of synergies between True North and Bupa, along with our co-investors in our holding vehicle, Fettle Tone and the positive role played by Faering Capital over the life of the investment. We are now pleased to welcome new investors who will join us in Niva Bupa's ongoing journey. Each of our investors brings a wealth of expertise across various dimensions of our business and possesses a profound understanding of the insurance ecosystem. This latest injection of capital will play a pivotal role in propelling the company towards its long-term ambitions and strategic objectives.”

Kotak Investment Banking is the exclusive financial advisor to True North and Niva Bupa, the official statement added. Niva Bupa has grown at a fast pace with a CAGR of 49 percent since FY20. In this period, it has doubled its retail market share from 4.2 percent in FY20 to 8.4 percent in FY23, the statement added.

Four years after picking up a majority stake from Max in Max Bupa Health Insurance (now Niva Bupa Health Insurance), homegrown private equity firm True North struck its biggest deal yet on September 30 by ceding control to JV partner Bupa.

True North, which also backs NBFC FedFina and Fincare Small Finance Bank, announced that it had agreed to sell a 20 percent stake to Bupa for around Rs 2,700 crore, which will result in the British firm's stake going up to 63 percent. Post the twin deals with Bupa and the new set of investors, True North's stake is expected to stand at around 28 percent.