Should you apply for PolicyBazaar IPO? Here are 9 things you must know
PB Fintech posted a consolidated loss of Rs 150.24 crore in FY21. The loss was much less compared to a loss of Rs 304.03 crore seen in FY20.
The much anticipated PolicyBazaar’s parent firm PB Fintech’s initial public offering has opened for subscription today. The company has already garnered Rs 2,569 crore from anchor investors ahead of the IPO. PB Fintech is a leading online platform for insurance and lending products and operates Policybazaar and Paisabazaar and via these platforms provides convenient access to insurance, credit and other financial products. Here are 9 key things you must know before subscribing to the issue.
1. Issue Details
The company plans to raise Rs 5,826 crore via the IPO. The issue comprises a fresh issue of shares worth Rs 3,750 crore, along with an offer for sale (OFS) of shares worth Rs 1,959.72 crore by existing promoters and shareholders.
2. Offer-For-Sale
Primarily, investor SVF Python II (Cayman) will sell shares worth Rs 1,875 crore. As of now, Cayman holds 9.45% stake. Founders Yashish Dahiya and Alok Bansal will now sell fewer number of shares via OFS. According to the RHP, Dahiya owns 4.27%, while Bansal has 1.45% in PB Fintech. As per news reports, Dahiya, was supposed to sell his shares worth Rs 250 crore as per the draft red herring prospectus (DRHP) filed in August. However, as per the latest DRHP filed by the company, he will now sell shares worth Rs 30 crore. Increased interest in tech IPOs and the headroom for further growth in its business.
3. IPO Price
Policybazaar has set a price band of Rs 940-980 per share for the IPO.
4. Objective
5. Financials
6. Grey Market Premium
7. What’s for retail investors?
8. About the company
In FY20, Policybazaar was India’s largest digital insurance marketplace with 93.4% market share based on number of policies sold, and constituted 65.3% of digital insurance sales by the number of policies sold.
Paisabazaar was launched in 2014 to provide personal loans and credit cards. It was India’s largest digital consumer credit marketplace with a 53.7% market share, based on disbursals in FY21.
The company generates revenues from commission and additional services. Going forward, the company aims to broaden and deepen consumer reach in India
9. Expert Take: KR Choksey
Factors that are a big positive for the company include its large, underpenetrated and growing market. Add to it the leadership in digital marketplace, strong ability to attract new consumers.
The factors that make the company susceptible to risks include that it has a history of losses and the company anticipates increased expenses in the future. Non-compliance to regulations is a major threat to the company’s business.