PolicyBazaar eyes Rs 6k cr from IPO

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Updated: August 19, 2021 2:52 PM

August 3: The offer consists of fresh issuance worth Rs 3,750 crore and a Rs 2,267.5-crore offer for sale (OFS) by a clutch of existing shareholders, including SoftBank and the firm’s co-founder and group CEO Yashish Dahiya.

PolicyBazaar’s revenue from operations increased to Rs 886.66 crore in FY21 from Rs 771.29 crore in FY20. Total comprehensive losses narrowed to Rs 153.27 crore in FY21 from Rs 303.13 crore in FY20.PolicyBazaar’s revenue from operations increased to Rs 886.66 crore in FY21 from Rs 771.29 crore in FY20. Total comprehensive losses narrowed to Rs 153.27 crore in FY21 from Rs 303.13 crore in FY20.

August 3: Online insurance aggregator PolicyBazaar aims to raise up to Rs 6,017.5 crore through its initial public offering (IPO), according to the preliminary documents filed by the company with capital markets regulator Sebi.

The offer consists of fresh issuance worth Rs 3,750 crore and a Rs 2,267.5-crore offer for sale (OFS) by a clutch of existing shareholders, including SoftBank and the firm’s co-founder and group CEO Yashish Dahiya.

While SoftBank plans to sell shares worth up to Rs 1,875 crore, Dahiya along with co-founder and group CFO Alok Bansal, collectively aims to sell shares worth up to Rs 345 crore, according to the draft red herring prospectus (DRHP).

The company also said it may consider a Rs 750-crore pre-IPO placement of stock.

PolicyBazaar joins a bunch of local start-ups that are looking to go public in the coming months. Food delivery firm Zomato already made its debut in July, while Paytm is set to launch a Rs 16,600-crore IPO later this year, the biggest since the Rs 15,200-crore public issue floated by Coal India in 2010. Fintech player Mobikwik is eyeing a Rs 1,900-crore IPO; beauty brand Nykaa, which is reportedly seeking $4-billion valuation in its IPO, is also gearing up to file its DRHP.

PolicyBazaar will allocate about Rs 1,500 crore of the net proceeds (of the fresh issue) towards funding the company’s future marketing initiatives over the next three financial years. The firm intends to use about Rs 375 crore on physical expansion initiatives, Rs 600 crore towards funding strategic investments, acquisitions and another Rs 375 crore of the net proceeds to expand its presence outside India, primarily in parts of West Asia and Southeast Asia. “We currently operate in Dubai through our subsidiary PB Fintech FZ-LLC (PFFL). We plan to scale up our operations and brand presence in Dubai and the broader GCC region by investing in creating a strong brand, building a robust team to cater to the prospective consumers and in our operational capacity through investments in developing technology and related infrastructure to service consumers in these geographies,” the company said.

According to Frost & Sullivan, in FY20, PolicyBazaar was India’s largest digital insurance marketplace with a 93.4% market share based on the number of policies sold. Nearly 65.3% of all digital insurance sales in India by volume was transacted through the platform during the year.

The company said it originated a premium of Rs 27,429 million for its insurer partners from new insurance policies in FY21 and a total premium of Rs 47,013 million, including renewals, representing 41.7% of the originated premium. It had over 48 million consumers registered on the platform as of March 31, 2021, who purchased over 19 million policies from its insurer partners. The annual number of visits on the PolicyBazaar website stood at about 126.5 million in FY21.

“In India, the online insurance market is highly under-penetrated with 1.0% of total premium sold online in FY20 compared to 13.3% in USA and 5.5% in China in 2020…Going forward, share of online insurance is expected to improve significantly due to rapid digital adoption,” the company said.

PolicyBazaar’s revenue from operations increased to Rs 886.66 crore in FY21 from Rs 771.29 crore in FY20. Total comprehensive losses narrowed to Rs 153.27 crore in FY21 from Rs 303.13 crore in FY20.

PB Fintech Limited response –

  1. It has been reported in the article that “The offer consists of fresh issuance worth 13,750 crore and a 12,267.5 crore offer for sale (OFS) by a clutch of existing shareholders, including SoftBank and the firm’s co-founder and group CEO Yashish Dahiya .” These statements are incorrect and extraneous to the DRHP. Please note that the selling shareholders in the OFS include SVF Python II (Cayman) Limited, which is a SoftBank entity. Further, please note that Yashish Dahiya holds the designation of Chairman, Executive Director and CEO of the
  2. It has also been reported in the article that “PolicyBazaar will allocate about 11,500 crore of the net proceeds (of the fresh issue) towards funding the company’s future marketing initiatives over the next three financial years.” Please note that such portion of the net proceeds will also be used towards investments in enhancing the visibility and awareness of our brands, including but not limited to Policybazaar and
  3. It has also been reported in the article that “In India, the online insurance market is highly underpenetrated with 1.0% of total premium sold online in FY20 compared to 13.3% in USA and 5% in China in 2020…Going forward, share of online insurance is expected to improve significantly due to rapid digital adoption, the company said.” Please note that the aforementioned statement is only appearing in the DRHP and the Company has not separately issued an official statement in this regard.
  4. It has also been reported in the article that Policybazaar has 51 insurer partners. Please note that the 51 insurer partners are as of March 31, 2021.

(This story was published in Financial Express edition date 3 August 2021.)

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