Up 11.5% today, 40% in 10 days. Is this newly listed stock set to keep rising?

Shares of Niva Bupa Health Insurance, a recent entrant on Dalal Street, jumped 11.5% in Wednesday's intraday trade (April 23), hitting a 17-week high of ₹86.40 apiece. The stock has ended higher in 8 out of the last 10 trading sessions (including today), resulting in a cumulative gain of 40% from its April 7 low.

Will the rally in Niva Bupa share price set to continue?

Domestic brokerage firms have recently issued a bullish outlook on the stock, highlighting the company’s strong foothold in the high-growth health insurance sector. Analysts believe that the company’s focus on retail customers and its efficient claim settlement process will drive faster growth, outpacing the broader industry.

Domestic brokerage firm Motilal Oswal in its latest report, initiated coverage on the stock with a 'Buy' rating and a target price of ₹100, citing strong growth prospects.

The brokerage noted that the company has emerged as one of the fastest-growing health insurers, posting a 34% CAGR in FY22–25 and capturing the highest incremental market share in the retail health segment. Motilal Oswal expects this momentum to continue, estimating a 25% CAGR in gross written premiums (GWP) over FY25–28E.

They highlighted Niva Bupa’s diversified product mix, with retail/group health contributing 68% and 31%, respectively, as of 9MFY25. Within the group segment, one-third of business comes from corporates, with the rest from credit-linked products.

The brokerage believes that consistent innovation and right pricing will sustain strong momentum in the retail health segment, which grew at a 33.5% CAGR during FY22–24. Among standalone health insurers (SAHIs), Niva Bupa was also highlighted for having one of the best claim settlement ratios (90% in FY24), supported by efficient claim management, transparency, quick AI-powered settlement processes, and a high-quality healthcare network.

Earlier, ICICI Securities also initiated coverage with a 'Buy' rating and a target price of ₹90. The brokerage said to Niva that the company is poised to benefit from India’s under-penetrated health insurance market, noting its retail market share has increased from 4% in FY19 to 9.4% in 11MFY25.

About the company

Niva Bupa Health Insurance is a joint venture between the Bupa Group and Fettle Tone LLP, specializing in health insurance. The company delivers an all-encompassing approach, enabling customers to access a broad health ecosystem and service capabilities via its Niva Bupa Health mobile app and website.

The company’s shares made a decent debut on the stock exchanges on Thursday, November 14, 2024, listing at ₹78.14 on the NSE, a 5.5% premium over the issue price of ₹74. The initial public offering (IPO), valued at ₹2,200 crore, was open for subscription between November 7 and November 11.

The IPO witnessed strong investor interest, receiving bids for 31.13 crore shares against the 16.3 crore shares on offer, achieving an overall subscription of 1.9 times.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.