Policybazaar IPO Opens Today: PB Fintech, the operator of online insurance platform Policybazaar and and banking products comparison portal Paisabazaar, is all set to launch their initial public offering (IPO) on Monday, November 1. Investors will get a chance to put bids for the public issue till November 3, 2021. The leading insurance and lending platform operator has fixed the price band for the IPO at Rs 940-980 per equity share. Let’s take a look at the details of Policybazaar IPO
1) The company is planning to raise Rs 5,700 crore through its IPO that comprises a fresh issue of Rs 3,750 crore and an offer for sale of Rs 1,960 crore by the shareholders that are selling their stake.
As part of the offer for sale (OFS), SVF Python II (Cayman) will sell shares worth Rs 1,875 crore, Yashish Dahiya will offload shares worth Rs 30 crore, Alok Bansal will divest shares worth Rs 12.75 crore, Shikha Dahiya will sell shares to the tune of Rs 12.25 crore and Rajendra Singh Kuhar will offload shares worth Rs 3.5 crore.
2) Policybazaar operator has fixed the issue price at Rs 940-980 per equity share with a face value of Rs 2 per equity share.
3) Investors can put a bid for minimum of 15 equity shares and in multiples of 15 equity shares.
4) The fintech company has set side aside 75 per cent of the total offer for the qualified institutional buyers while 15 per cent has been for non-institutional buyers . The remaining 10 per cent will be reserved for retail investors.
5) PB Fintech will use the proceeds from the issue to increase visibility and awareness of company’s brands — Policybazaar and Paisabazaar. Around Rs 1,500 crore will go towards brand visibility. At least Rs 375 crore will be used for new opportunities to expand consumer base including offline presence. The company would like to use Rs 600 crore for strategic investments and acquisitions while a lumpsum amount of Rs 375 crore will go for expanding presence outside India, besides general corporate purposes. The offer for sale money will go to selling shareholders including SVF Python II.
6) PB Fintech has built India’s leading online portal for insurance Policybazaar and lending products Paisabazaar. The company provides convenient access to insurance, credit, and other financial products and aims to create awareness in India about the financial impact of death, disease, and damage. Policybazaar was India’s largest digital insurance marketplace among all online insurance distributors with 93.4 percent market share based on number of policies sold in financial year 2020. It constituted a whopping 65.3 per cent of all digital insurance sales in India by number of policies sold.
Launched in 2014, Paisabazaar aims to “provide ease, convenience, and transparency in selecting a variety of personal loans and credit cards for the consumers.” According to Frost & Sullivan, Paisabazaar was India’s largest digital consumer credit marketplace with a 51.4 per cent market share, based on disbursals in fiscal 2020.
7) PB Fintech posted a consolidated loss of Rs 150.24 crore for the financial year FY21. The loss was much less compared to a loss of Rs 304.03 crore seen in FY20. Revenue from operations grew 15 per cent year-on-year to Rs 886.66 crore in FY21.
During the June quarter 2021, loss stood at Rs 110.84 crore. Revenue in the same period grew by 35.8 per cent year-on-year to Rs 237.73 crore from Rs 175.02 crore.
8) For investors, Amarjeet Maurya – AVP – mid caps, Angel One Ltd said, “In terms of valuations, the post-issue FY2021 EV/Sales works out 47.6x to (at the upper end of the issue price band), which is high considering ’s historical financial performance (making continuous losses on bottom-line front). Considering the company’s overall business model and higher valuation, we recommend a NEUTRAL rating on the issue.”
9) Policybazaar shares were trading at Rs 150 in the grey market on Monday, according to the market observers. The grey market premium of Policybazaar was at Rs 1,130 on November, more than 15 per cent up over the higher end of the issue price fixed at Rs 980.
10) Goldman Sachs, Nomura, BlackRock Global Funds, Morgan Stanley, Canada Pension Plan Investment Board, Fidelity, Abu Dhabhi Investment Authority, ICICI Prudential Mutual Fund (MF), SBI MF, Axis MF and UTI MF are among the anchor investors that have been allocated shares.