PB Fintech IPO: All You Need To Know
PB Fintech IPO: All You Need To Know
PB Fintech Ltd., the parent of policybazaar.com and paisabazaar.com, will launch its three-day IPO on Nov. 1.
The IPO comprises of fresh issue worth Rs 3,750 crore and an offer for sale—by Softbank Vision Fund and founders Yashish Dahiya, Alok Bansal, Founder United Trust, Shikha Dahiya and Rajendra Singh Kuhar—worth Rs 1,959.7 crore at the upper end of the price band of Rs 940-980 apiece. Together, the company is selling 13% of the post issue paid-up equity worth Rs 5,709.7 crore.
The company does not have any identifiable promoters and founders are classified as public shareholders.
PB Fintech is seeking a market value of Rs 44,051 crore at the upper end of the price band. The company in February this year made a private placement to Falcon Edge Capital at Rs 366 apiece.
Issue Details
Face value: Rs 2 per share.
Minimum lot: 15 shares and multiples.
Price band: Rs 940-980.
Fresh issue: Rs 3,750 crore.
Offer for sale: Rs 1,959.7 crore.
Listing: National Stock Exchange and BSE.
Book running lead managers: Kotak Investment Banking, Morgan Stanley India Co., Citigroup Global Markets India, ICICI Securities, HDFC Bank, IIFL Securities and Jefferies.
Business
PB Fintech allows users to compare and buy insurance plans through Policybazaar, India’s largest digital insurance marketplace with 93.4% market share by number of policies sold in FY20.
The company also facilitates borrowing via its Paisabazaar platform. It has partnered with 54 large banks, non-bank and fintech lenders, offering personal, business and home loans, credit cards, and loans against property.
It primarily generates revenue from the following sources:
Policybazaar: Commission it receives from its insurer partners, besides telemarketing, sales and post-sales, account management and premium-collection services.
Paisabazaar: Income from the commission it receives from lending partners, besides credit advisory and related services that it provides to its consumers and lenders.
Online marketing, consulting and technology services to insurers and lenders.
As of Sept. 30, 48 insurers, or 85% of all licenced insurance companies in India, sold their products on Policybazaar. Paisabazaar had 56 partnerships with large banks, non-bank financial companies and fintech lenders.
The company now plans to open 200 physical stores by March 2024.
Use of Proceeds
How PB Fintech plans to use the proceeds of the fresh issue:
Rs 1,500 crore to enhance visibility and awareness of brands, including Policybazaar and Paisabazaar.
Rs 375 crore on expanding growth initiatives to increase consumer
base, including offline presence.
Rs 600 crore for funding strategic investments and acquisitions.
Rs 375 crore on expanding presence outside India.
Financials
The company reported a revenue from operations of Rs 886.6 crore in the fiscal ended March 2021. It reported an operating and net loss for the last three financial years, including the first quarter of fiscal 2022.
Competition
While PB Fintech has no listed peers, insurers have now started pushing their products through their own websites and mobile applications.
Risks
The Covid-19 pandemic, or a similar public health threat, could adversely affect its business.
The company’s insurer and lending partners failing to offer insurance and credit products catering to the evolving needs of consumers.
Any harm to the brand, failure to maintain and enhance its brand recognition or reputation in a cost-effective manner.
Policybazaar has a history of losses and the company anticipates increased expenses in the future.
Policybazaar’s business is subject to intense competition.
Policybazaar’s insurance broking business is subject to various laws and regulations and the company’s inability to comply with them may adversely affect its business.