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Niva Bupa shares rise after IRDAI proposes distribution reforms
Motilal Oswal maintained a bullish stance, citing a potential 31% upside, but noted that changes to product and distribution structures could pressure growth.
Niva Bupa Health Insurance shares ended nearly 1.63% higher on Friday, after India’s Insurance Regulatory and Development Authority of India (IRDAI) proposed reforms covering distribution for insurers, according to LiveMint Markets. The stock had dropped sharply in the prior session before recovering.
Niva Bupa said the draft distribution norms are positive over the medium term, with only minor impact expected on near term growth, during a conference call on Thursday, as described by LiveMint Markets. The insurer also said the measures would be a net positive for the company, while acknowledging that reassessing product constructs and distribution architectures could pressure growth.
Motilal Oswal reiterated its bullish view on the shares and forecast potential upside of 31%, LiveMint Markets reported. The brokerage pointed to lower commissions under the IRDAI draft, which it said could keep prices flat for longer, and noted that Niva Bupa is already complying with the 20% first year and 10% renewal cap.