Policybaazar operator PB Fintech initial public offering (IPO) got listed on the bourses on Monday. On opening, the PB Fintech IPO listing saw a price of Rs 1,150 at the Bombay Stock Exchange. This was around 17.35 per cent increase against the issue price of Rs 980 at the upper side of the band. The parent company of Paisabazaar has been listed at both the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) at 10 am on November 15. It received a healthy response from the buyers. The decent listing of the PB Fintech or Policybazaar IPO has taken many experts and analysts by surprise. At 10:05 am, PB Fintech stocks were listing at Rs 1,199 per share on BSE, following a robust response for investors. On NSE, the stocks were trading at Rs 1,196.1 apiece.
The IPO had been oversubscribed by 16.6 times on its closing day, that is, on November 3. Investors put bids for 57,23,84,100 shares against 3,45,12,186 shares on offer, according to data from National Stock Exchange or NSE. The portion set aside for qualified institutional buyers was subscribed 24.89 times, retail investors’ portion was booked 3.31 times and that of non-institutional investors saw 7.82 times subscription.
Policybaazar parent company wanted to raise Rs 5,700 crore through its IPO that comprised a fresh issue of Rs 3,750 crore and an offer for sale of Rs 1,960 crore by the shareholders that are selling their stake. It has fixed the issue price at Rs 940-980 per equity share with a face value of Rs 2 per equity share.
PB Fintech will use the proceeds from the issue to increase visibility and awareness of company’s brands — Policybazaar and Paisabazaar. Around Rs 1,500 crore will go towards brand visibility. At least Rs 375 crore will be used for new opportunities to expand consumer base including offline presence. The company would like to use Rs 600 crore for strategic investments and acquisitions while a lumpsum amount of Rs 375 crore will go for expanding presence outside India, besides general corporate purposes. The offer for sale money will go to selling shareholders including SVF Python II.
Policybazaar IPO was commanding a premium of Rs 125 in the grey market, according the people dealing unlisted market and shares. The grey market premium of Policybazaar IPO jumped in the last few days after a tepid week, according to market observers. Policybazaar IPO was trading at Rs 1,105 in the grey market, around 12 per cent up over the higher end of the issue price fixed at Rs 980.
“The IPO of PB Fintech got a mixed response from the investors. Undoubtedly, the company is very well placed in its segment but the aggressive pricing made investors wary. Due to expensive pricing, listing gains may not be remarkable but gains of 10-15 per cent on listing cannot be ruled out,” said Abhay Doshi, founder, UnlistedArena.com, dealing in Pre-IPO & Unlisted Shares.
On valuation: “Macros of the insurance sector are positive and so are the fundamentals of PB Fintech . The company with its dominant position in the digital insurance and credit market, is expected to benefit from the abundant business opportunities in both the markets. At higher price band of Rs 980, PB Fintech is demanding an EV/TTM Sales multiple of 40.5x, which seems to be very stretched,” said Choice Broking in a note.
PB Fintech has built India’s leading online portal for insurance Policybazaar and lending products Paisabazaar. The company provides convenient access to insurance, credit, and other financial products and aims to create awareness in India about the financial impact of death, disease, and damage. Policybazaar was India’s largest digital insurance marketplace among all online insurance distributors with 93.4 percent market share based on number of policies sold in financial year 2020. It constituted a whopping 65.3 per cent of all digital insurance sales in India by number of policies sold.
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