PolicyBazaar's DRHP also said the company may consider raising close to Rs 750 crore by way of a private placement of equity shares ahead of the IPO.
By Salman SH
PB Fintech, the parent firm of insurance aggregator PolicyBazaar, on Tuesday received approval from the Securities and Exchange Board of India (Sebi) to raise Rs 6,017.50 crore through an initial share sale.
A company spokesperson confirmed the development to FE but did not elaborate on other details of the upcoming initial public offer (IPO).
PB Fintech had filed draft papers for its proposed IPO in August which included a fresh issue of Rs 3,750 crore worth of equity shares and an offer for sale (OFS) of Rs 2,267.50 crore by existing investors and promoters.
The company’s existing investor, SoftBank, which owns a 9.45% stake will offload shares worth Rs 1,875 crore, while PolicyBazaar co-founders Yashish Dahiya and Alok Bansal will sell shares worth Rs 345 crore in the upcoming IPO.
Three other promoters are also expected to offload shares worth Rs 47.5 crore, according to the company’s draft red herring prospectus. The firm is seeking a valuation of around $6 billion.
PolicyBazaar’s DRHP also said the company may consider raising close to Rs 750 crore by way of a private placement of equity shares ahead of the IPO.
Proceeds of the fresh issue will be used towards enhancing visibility and awareness of the company’s brands to look for new opportunities to expand growth initiatives to increase the consumer base, including offline presence.
In addition, the proceeds will be used for funding strategic investments and acquisitions, expanding presence outside India and other general corporate purposes.
Kotak Mahindra Capital Company, Morgan Stanley India Company, Citigroup Global Markets India, ICICI Securities, HDFC Bank, IIFL Securities and Jefferies India are the book running lead managers for the firm’s proposed IPO.
In FY21, PolicyBazaar’s parent company reported Rs 957.4 crore in revenue and a loss of `150 crore, which shrunk by almost half compared with the Rs 304-crore loss reported in FY20.
However, the company mentioned in its prospectus that it expects “costs to increase over time and our losses will continue given the investments expected towards growing our business”.
PolicyBazaar, which was founded in 2008 by IIT Delhi and IIM Ahmedabad alumni Dahiya, Bansal, and Avaneesh Nirjar, has raised close to $760 million in equity financing to date. Some of its prominent investors include names like FalconEdge, Tencent, Temasek, InfoEdge and others.
The Gurgaon-based firm aggregates insurance and lending products through two online platforms including PolicyBazaar and Paisabazaar. The group also operates a third entity named DocPrime (EtechAces Marketing and Consulting Pvt Ltd) which offers online doctor consultation and home-based lab tests.
PolicyBazaar is one of the many Indian tech start-ups looking to go public in 2021. Apart from PolicyBazaar, start-ups including OYO Rooms, MobiKwik, Paytm, Nykaa and Delhivery are expected to go public this year.
The number of start-ups seeking to go public has increased considerably in the past few months, thanks to Sebi’s recent relaxations for loss-making entities looking to go public.