Policybazaar’s parent company PB Fintech made a positive stock market debut on Monday as benchmark indices moved higher. PB Fintech’s shares began trading at Rs 1,150 per share, up Rs 170 apiece or 17.35% from the upper end of the IPO price band of Rs 980 per share. The Rs 5,600 crore IPO of PB Fintech was subscribed 16.59 times by investors earlier this month. PB Fintech runs Policybazaar, India’s largest digital insurance marketplace, with FY20 market share of 93.4%, based on the number of policies sold through online insurance distribution platforms. On listing, Policybazaar was commanding a market capitalization of Rs 51,692 crore.
PB Fintech’s IPO consisted of a fresh issue of equity shares worth Rs 3,750 crore and an Offer for Sale (OFS) by existing shareholders worth Rs 1,875 crore. Amid the IPO rush on Dalal Street, institutional investors had subscribed their portion of PB Fintech’s IPO nearly 25 times while NIIs had bid for 7.82 times the portion reserved for them. Retail investor subscription was more than 3 times.
“The company saw a total revenue CAGR of ~34% over FY19–21, led by insurance web aggregator services (68.5% of FY21 total revenues), which grew by ~40% over FY19–21,” according to analysts at domestic brokerage and research firm Motilal Oswal. The brokerage firm said that the issue is valued at 46.3x FY22 Mcap/Sales on a post issue and annualized basis, adding that it seems expensive compared to global peers. “However, the issue is likely to attract investors interest given its leadership position in both digital insurance/consumer credit marketplace and customer centric approach,” they said. Motilal Oswal had a ‘Subscribe for Listing Gains’ rating on the issue.
Of the net proceeds from the fresh issue, Rs 1,500 crore will be used for enhancing the visibility & awareness of PB Fintech’s brands while Rs 375 crore will be utilized in funding new opportunities. Further the company plans to use Rs 600 crore for funding strategic investments and acquisitions and Rs 375 crore will be used to expand business outside India. Analysts at Choice Broking have a ‘Subscribe’ for long term rating on the IPO adding that, PB Fintech with its dominant position in the digital insurance and credit market, is expected to benefit from the abundant business opportunities.