MC Exclusive: I-T may soon begin tax assessment proceedings against PB Fintech

There are regulatory know your customer (KYC) non-compliance issues in PB Fintech, the holding company of Policybazaar.

The income tax authorities may soon begin assessment proceedings against online insurance aggregator PB Fintech, the parent company that houses online marketplaces Policybazaar and Paisabazaar, which has been under the scanner for regulatory lapses and KYC non-compliance, a senior government official said.

“There are regulatory know your customer (KYC) non-compliance issues in PB Fintech, the holding company of Policybazaar. The income tax department had conducted a survey into the company. There are issues of regulatory lapses. Following the survey report, the IT department may soon begin assessment proceedings against the company,” the official told Moneycontrol.

Income Tax officials had visited Paisabazaar, a wholly owned subsidiary  and  PB Fintech Limited on December 13-14 2023 and enquired about certain vendors.

PB Fintech in a BSE disclosure had said, "The company has provided information required by the IT Officials and shall continue to provide any further details/information that might be required by the department
in future. The business operations of Paisabazaar continue as usual and have not been impacted due to the survey proceedings."

Billionaire Azim Premji's private equity fund, Premji Invest on February 2, divested a one percent stake in PB Fintech for Rs 457 crore through an open market transaction. Foreign venture capital investor Claymore Investments (Mauritius) sold a 5.41 percent equity stake in PB Fintech on February 1 through open market transactions in the BSE. Singaporean sovereign wealth fund Temasek Holdings sold its entire 5.42 percent stake in Policybazaar's parent firm PB Fintech on February 1 for Rs 2,425 crore.

The Gurugram-based company  turned profitable for the first time in its history in the third-quarter (Q3FY24) with a profit of Rs 37 crore, aided by robust growth in insurance premiums, better renewals which have higher margins and improvement in contributing margins. It had reported a loss of Rs 87 crore during Q3 of FY 23.

The company also reported a 43 percent growth in operating revenue, which stood at Rs 871 crore for the December quarter, compared with the Rs 610 crore the company had reported in the same quarter of the last financial year.

PB Fintech was co-founded by Yashish Dahiya and Alok Bansal in 2008. The company operates online insurance aggregator Policybazaar and credit comparison portal Paisabazaar. The company made its stock market debut in November 2021.