Niva Bupa rallies 27% in 2 days on buzz of lower GST on insurance premiums

The company said it has not received any official communication from any government authority or department regarding the change of GST rates on life and health insurance premiums

Shares of Niva Bupa Health Insurance Company (Niva Bupa) climbed 15 per cent to Rs 94.40 on the BSE in Wednesday’s intra-day trade amid heavy volumes. In two days, the stock of the general insurance company has surged 27 per cent on reports of a reduction in the Goods and Services Tax (GST) rate on health and life insurance policies.

 

At 10:06 AM, Niva Bupa share price was trading 13 per cent higher at Rs 92.45, as compared to the 0.45 per cent rise in the BSE Sensex. The average trading volumes on the counter had jumped nearly three-fold, with a combined 19.55 million equity shares changing hands on the NSE and BSE till 10:07 am. In comparison, the BSE Sensex was up 0.45 per cent at 81,207.

 

Finance Minister Nirmala Sitharaman on Monday said the cost of insurance to the policy holder is expected to come down if the GST Council recommends a reduction in GST rate on health and life insurance policies, PTI reported.

 

In a written reply in the Lok Sabha, she said the GST Council, in its September 9 meeting, had recommended constituting a Group of Ministers (GoM) to holistically look into the issues pertaining to GST on life insurance and health insurance, the news agency reported.

 

In this regard, Niva Bupa has clarified that it has not received any official communication from any government authority or department on the change of GST rates on health insurance premiums. “The Company is not aware of any such developments, except for news as appeared in media. We, hence cannot verify/confirm the news,” the company said.

 

Meanwhile, the stock price of Niva Bupa has recovered 36 per cent from its 52-week low price of Rs 69.20 on November 18. The company made its stock market debut on November 14. It issues shares at a price of Rs 74 per share.

 

Niva Bupa Health Insurance Company is a joint venture between the Bupa Group and Fettle Tone LLP that provides insurance in the health sector. Through a robust network of healthcare partners and facilities, Niva Bupa provides access to quality healthcare, ensuring policyholders receive comprehensive care and financial protection in medical emergencies. 

 

The company’s offerings include individual health plans, family floater policies, and critical illness covers, tailored to address various health concerns and financial security needs. The company serves 14.99 million active insured lives, utilising a diversified distribution strategy through both direct and intermediate channels.

 

India’s insurance gross direct premium income has surged from Rs 6.1 trillion in FY18 to Rs 10.4 trillion in FY23. It is projected to reach Rs 18-19 trillion by FY28, driven by rising incomes and greater insurance accessibility, Geojit Financial Services had said in the company's IPO note.