Policybazaar and Paisabazaar operator PB Fintech shares made a decent debut on November 15 as the stock listed with a 17.35 percent premium. The opening tick on the BSE was Rs 1,150.
The price trend was largely in line with analysts’ expectations and grey market trend.
The initial share sale of online insurance and lending products distributor has seen a good subscription of 16.58 times during November 1-3, garnering bids worth Rs 56,093.64 crore.
The portion set aside for qualified institutional buyers was subscribed 24.89 times, and that of non-institutional investors saw 7.82 times subscription. Retail investors also supported the offer with their reserved portion being subscribed 3.31 times.
PB Fintech, which is widely known for Policybazaar, mopped up Rs 5,625 crore through its public issue that composed of a fresh issuance of shares worth Rs 3,750 crore and an offer for sale of Rs 1,960 crore by selling shareholders.
With fresh issue proceeds, the company will enhance visibility and awareness of its brands (including but not limited to Policybazaar and Paisabazaar), expand consumer base including offline presence, fund strategic investments and acquisitions, and expand presence outside India.
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PB Fintech’s Policybazaar is India’s largest digital insurance marketplace with a 93.4 percent market share based on the number of policies sold as on FY20. In FY20, 65.3 percent of digital insurance sales in India by volume was transacted through Policybazaar. It became a direct insurance broker on June 10, 2021, from a web aggregator as web aggregator license had limitations on commissions and offline sales ability.
Majority of analysts had a subscribe rating on the issue. “We like the company’s focus on growth, willingness to do more experiments while focusing on core business, international expansion and inorganic growth plans. Considering multiple growth drivers and leadership position of Policybazaar in the digital ecosystem, investors should look to invest in the IPO for listing as well for long term gains,” said KR Choksey Research.
“The company is loss-making but insurance penetration is low in India, online is even very less and the scope for such aggregators/online brokers is very large,” Dalal & Broacha Stock Broking said. “At the upper price band of Rs 980, the company is demanding 43x FY22 sales which is expensive, but since potential is massive we recommend investors to subscribe to the IPO for the long term, although listing gains may be limited.”
PB Fintech posted a consolidated loss of Rs 150.24 crore for the financial year FY21, much lower compared to a loss of Rs 304.03 crore seen in FY20. On the other side, revenue from operations had also shown strong growth, rising to Rs 886.66 crore in FY21, up from Rs 771.3 crore in FY20, registering a 15 percent growth.
In the quarter ended June 2021, loss stood at Rs 110.84 crore, increasing from loss of Rs 59.75 crore in June 2020 quarter. Revenue in the same period grew by 35.8 percent to Rs 237.73 crore from Rs 175.02 crore YoY.
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