| Rating |
| Subscribe
(Aggressive Investors) |
| Issue Offer | |
| Issue Opens on | Nov 01, 2021 |
| Issue Close on | Nov 03, 2021 |
| Total IPO size (cr) | 5,625 |
| Fresh issue | 3,750 |
| Offer For Sale (cr) | 1,875 |
| Price Band (INR) | 940-980 |
| Market Lot | 15 |
| Face Value (INR) | 2 |
| Retail Allocation | 10% |
| Listing On | NSE, BSE |
| Objects of the issue
⮚ For enhancing visibility and business expansion ⮚ To expand consumer base including offline presence. ⮚ Strategic investments and acquisitions ⮚ For General corporate purposes. |
| Issue Break-up (%) | |
| QIB Portion | 75 |
| NIB Portion | 15 |
| Retail Portion | 10 |
| Indicative Timetable | |
| Finalisation of Basis of Allotment | 10-11-2021 |
| Refunds/Unblocking
ASBA Fund |
11-11-2021 |
| Credit of equity shares to DP A/c | 12-11-2021 |
| Trading commences | 15-11-2021 |
PB Fintech is India’s largest online platform for insurance and lending products leveraging the power of technology, data and innovation.
It provides convenient access to insurance, credit and other financial products and aims to create awareness amongst Indian households about the financial impact of death, disease and damage. The company launched Policybazaar, its flagship platform, in 2008 to respond to Consumers’ need for more awareness, choice and transparency and create a consumer-pull based, provider-neutral model for insurance distribution.
In 2014, the company launched Paisabazaar with the goal to transform how Indians access personal credit by accentuating ease, convenience and transparency in selecting a variety of personal loans and credit cards.
⮚ In Fiscal 2020, Policybazaar was India’s largest digital insurance marketplace among all online insurance distributors with a 93.4% market share based on the number of policies sold.
⮚ Paisabazaar was India’s largest digital consumer credit marketplace with a 53.7% market share, based on disbursals in Fiscal 2021
⮚ Follows an asset-light capital strategy and do not underwrite any insurance or retain any credit risk on their books. Policybazaar is registered with and regulated by IRDAI as a direct insurance broker.
⮚ The market for insurance products as well as the lending market in India is expected to be more than double by 2030, which represents a meaningful market opportunity for the company.
⮚ Policybazaar offers an information-rich, user-friendly, and tech-driven self-service platform for
-
- pre-purchase research,
- purchase, including application, inspection, medical check-up, and payment; and
- post-purchase policy management, including claims facilitation, renewals, cancellations, and refunds
Outlook & Valuation
The company had consistent revenue growth in the last 3 years. The company’s revenue for FY21 was at Rs 957.4 crore VS Rs 855.56 cr in FY20 while the company has never registered profit.
The company recorded a loss of (150.24) cr in FY21 against a loss of Rs (304.03) cr in FY20. New edge businesses are garnishing investors‘ interest in India and we have seen many multi-baggers from such kinds of businesses in the USA and China.
PB fintech is the operator of India’s largest online platform for insurance and lending products and aiming toward expansion of its offline and customer base. The valuation of the company cannot be ascertained as the company is loss-making while the EV/Sales work out 47.6x.
Eying the positive outlook of the company and under penetration of the insurance industry, we assign a “SUBSCRIBE” only for Aggressive investors.
IPO Note
PB FINTECH IPO (POLICY BAZAAR)
KEY MANAGERIAL PERSONNEL
⮚ Mr Yashish Dahiya is the Chairman, Executive Director and CEO of the Company He holds a bachelor’s degree in technology from IIT, Delhi, a PGDM from IIM, Ahmedabad
⮚ Mr Alok Bansal is a Whole-time Director and CFO of the Company. He was previously associated with Voltas Ltd., GE (India), iGate Global Solutions Ltd, M&M and FE Global Technology Services Pvt. Ltd.
⮚ Ms Kitty Agarwal is a Non-executive Director of the Company. She is currently associated with Info Edge Ventures as a partner and was previously associated with Info Edge Ltd. as head of corporate development.
⮚ Mr Sarbvir Singh is the President of Policybazaar and Non-executive Director of the Company.
⮚ Mr Munish Ravinder Varma is a Non-executive Director of the Company. He currently serves as a managing partner at SoftBank Investment Advisers. He was also associated with Deutsche Bank AG.
⮚ Mr Kaushik Dutta is an Independent Director of the Company He is a fellow member of the Institute of Chartered Accountants of India with over 25 years of experience.
⮚ Ms Veena Vikas Mankar is an Independent Director of the Company. Ms. Mankar started her career with ICICI Limited and has worked with various financial institutions.
⮚ Ms Lilian Jessie Paul is an Independent Director of the Company.
⮚ Mr Nilesh Bhaskar Sathe is an Independent Director of the Company.
⮚ Mr Gopalan Srinivasan is an Independent Director of the Company.
COMPETITIVE STRENGTHS
⮚ Created strong, Consumer-friendly brands offering wide choice, transparency and convenience well-diversified business model.
⮚ Proprietary Technology, Data and Intelligence Stack
⮚ Benefits from economies of segmentation
⮚ Strong network effects for Policybazaar and Paisabazaar platforms.
⮚ High renewal rates provide clear visibility into future business and deliver superior economics.
⮚ Capital efficient model with low operating costs.
⮚ Founders with clarity of purpose backed by experienced management.
KEY CONCERNS
⮚ The company has a history of losses and it anticipates increased expenses in the future.
⮚ The COVID-19 pandemic, or a similar public health threat, could adversely affect their business, financial condition, and results of operations.
⮚ Failure to deal effectively with any fraud perpetrated on our platforms could harm our business.
⮚ Their strategy to expand internationally involves risks that could increase expenses, adversely affect results of operations and require increased time and attention from the management.
⮚ Business is subject to intense competition.
⮚ Failure to maintain brand recognition and reputation will adversely affect business financials.
⮚ The insurance broking business is subject to various laws and regulations.
⮚ Highly dynamic and competitive online fintech industry.
IPO Note
PB FINTECH IPO (POLICY BAZAAR)
COMPARISON WITH LISTED INDUSTRY PEERS
There are no listed companies in India that engage in a business similar to that of the Company. Accordingly, it is not possible to provide an industry comparison in relation to the Company while the EV/Sales work out to be 47.6x.
FINANCIALS (RESTATED CONSOLIDATED)
| Particulars (Rs. In Millions) FY 2021 FY 2020 FY 2019 |
| Equity Share Capital 12.35 11.09 8.77 |
| Other Equity 19,904.99 12,647.38 4,894.17 |
| Net Worth 19,917.34 12,658.47 4,902.94 |
| Total Borrowings — — — |
| Revenue from Operations 8,866.62 7,712.97 4,922.45 |
| EBITDA (1,597.63) (3,198.92) (2,512.32) |
| Profit Before Tax (1,419.14) (2,948.41) (3,374.30) |
| Net Profit for the year (1,502.42) (3,040.29) (3,468.11) |
