Flood insurance provider Neptune targets $2.8 billion valuation in US IPO

(Reuters) -Neptune Insurance said on Monday it was targeting a valuation of up to $2.76 billion in its U.S. initial public offering, as the IPO market continues to run hot.

Some existing shareholders of the flood insurance provider are targeting to raise up to $368.4 million by offering 18.4 million shares priced between $18 and $20 apiece.

The St. Petersburg, Florida-based company joins a growing roster of insurance firms that have tapped public markets since May, with some calling it a “breakout year” for issuance from the industry.

Aspen Insurance, American Integrity, Ategrity Specialty, Slide Insurance and Accelerant have gone public in New York since May.

Wall Street had also turned to insurance firms to reopen the new listings market in May after tariff-driven chaos slammed shut IPO activity.

Launched in 2018, Neptune sells residential and commercial flood insurance policies on behalf of carrier partners throughout the U.S.

The demand for flood insurance is expected to increase as climate change fuels more frequent and severe storms, with millions vulnerable to damages.

Neptune’s main rival is the National Flood Insurance Program (NFIP), a U.S. government-run entity that is the largest provider of flood insurance in the country.

In 2023, private equity firms Bregal Sagemount and FTV Capital had bought a minority stake in Neptune.

Cornerstone investors T. Rowe Price Investment Management and AllianceBernstein have separately indicated interest in purchasing up to $75 million in shares from Neptune’s offering.

Morgan Stanley, J.P. Morgan and BofA Securities are the lead underwriters for the offering. Neptune will list its stock on the NYSE under the symbol “NP.”

(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Shreya Biswas)