PB Fintech Limited incorporated in on June 4, 2008, is the parent company of Policybazaar and Paisabazaar and it is India’s largest online platform for insurance and lending products leveraging the power of technology, data and innovation. It provides convenient access to insurance, credit and other financial products and aims to create awareness amongst Indian households about the financial impact of death, disease and damage. Policybazaar offers Consumers an information-rich, user-friendly, and tech-driven self-service platform for i) pre-purchase research, ii) purchase, including application, inspection, medical check-up and payment; and iii) post-purchase policy management, including claims facilitation, renewals, cancellations and refunds.
As of September 30, 2021, 48 Insurer Partners have offered over 390 term, health, motor, home and travel insurance products on its Policybazaar platform, representing a substantial portion of all licensed insurance companies in India. In Fiscal 2020, 65.3% of all digital insurance sales in India by volume were transacted through Policybazaar. According to Frost & Sullivan, Paisabazaar was India’s largest digital consumer credit marketplace with a 51.4% market share, based on disbursals in Fiscal 2020.
Promoters & Shareholding:
Professionally managed company that does not have an identifiable promoter.
Public Issue Details:
Offer for sale: Fresh issue of approx. 38,265,306 equity shares of Rs. 2 aggregating up to Rs. 3,750 Cr and OFS of approx. 19,132,653 equity shares aggregating up to Rs. 1,875 Cr.
Total IPO Size: Rs. 5,625 Cr.
Price band: Rs. 940 – Rs. 980.
Objective: For enhancing visibility and awareness of company’s brands, Funding strategic investments and acquisitions, look for new opportunities to expand growth initiatives to increase the consumer base and for general corporate purpose.
Bid qty: minimum of 15 shares (1 lot) for Rs. 14,700 and maximum of 13 lots.
Offer period: 1st Nov 2021 – 3rd Nov 2021.
Date of listing: 15th Nov 2021.
- India’s largest online platform for insurance and lending products.
- Capital efficient model with low operating costs.
- Professional and experienced management team.
- High renewal rates.
- Both Policybazaar and Paisabazaar platforms have large, efficient and intelligent networks.
- The company has collaborative partnership with various companies for insurance and lending products.
- The company has incurred losses in the last 3 years.
- The company has had negative cash flows in the past.
- It is subject to a stringent regulatory framework that affects the flexibility of its operations and increases compliance costs.
- It relies on third-party vendors for payment processing services.
Subscribe or avoid?
Sectorial outlook – In FY20, India had a Rs. 7.6 trillion insurance industry, measured in terms of total Premium. This industry is expected to grow at a 17.8% CAGR to reach Rs. 39.0 trillion by FY30, with life, health and other non-life insurance growing at 18.8%, 15.3% and 13.5% CAGR respectively. Despite being 10th largest, India’s life insurance penetration remains lower at 24.6% when compared to other developed economies but in recent times due to increasing digital adoption with internet, smartphone penetration doubling, Improving financial literacy and various government initiatives (such as India stack, PMJDY, PMMY etc) is expected have positive impact on the company and its business.
The financials (revenue and net profit) are shown in graph below:
Valuation – For the last 3 years the company has had negative EPS hence it’s not possible to calculate the P/E. There are no listed peers. P/BV is around 18, hence it is not possible to determine whether it’s overpriced or under-priced. GMP for this IPO currently is around Rs. 175 as of today.
Recommendation – The IPO market is Red hot owing to the current Bull run because of which you might expect some listing gains, however we would recommend investors with very high risk appetite to “SUBSCRIBE” conservative appetite can skip this IPO and may look at buying on dips.
This article should not be construed as investment advise, please consult your Investment Adviser before making any sound investment decision. If you do not have one visit mymoneysage.in now.