PB Fintech share price jumped as much as 3 percent on September 30, partially recovering recent losses, after the company management clarified that it will be a minority investor in the proposed healthcare venture, with a one-time non-recurring investment. Chairman and Group CEO Yashish Dahiya said in an interview with CNBC TV18 that PB Fintech intends to acquire a 20-30 percent stake in the venture, with a potential investment amounting to up to $100 million, subject to board approval.
PB Fintech share price rose to Rs 1,700 in the morning trade, up 3.5 percent from the previous close. The clarification comes in the wake of a recent correction in PB Fintech's share price, which saw a decline of 15 percent over the last five trading sessions.
‘This will be a one-time investment. We don’t intend to make a recurring investment in the healthcare company,’ Dahiya said in the interview. Further, the new healthcare company aims to generate its own resources for growth and may attract private equity investors and other financial institutions, he added.
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As for the reason behind the company’s decision to tap into the healthcare sector, Dahiya said, “A middle-class person can’t afford a bed for Rs 78,000 per night. We are looking to bridge the trust gap between hospitals and insurance companies.”
Earlier, last week, Alok Bansal, Co-Founder and Executive Vice Chairman of PB Fintech, reinforced the company’s commitment to entering the healthcare space, indicating that there would be no reconsideration of this strategic move. Bansal had cited the need for the healthcare venture for the middle class, stressing that it aligns with the company’s broader vision of financial inclusion.
The investment strategy has garnered mixed reactions from analysts. Brokerage firm Bernstein maintained its “outperform” rating on PB Fintech, setting a price target of Rs 1,760. They noted that while investors are attracted to PB Fintech’s high growth and strong business model, some may view this backward integration into healthcare as a significant shift from its capital-light business model, which appears to be weighing on the stock currently.
On Friday, shares of PB Fintech had closed 3 percent lower, marking a fifth consecutive day of decline at Rs 1,632, although the stock has still doubled in value so far in 2024.
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