Policybazaar’s Rs 5,700-crore IPO is expected to consist of a fresh issue of Rs 3,750 crore and an offer for sale (OFS) component of Rs 1,933.50 crore, in which existing shareholders and promoters will sell shares. The price band for the issue has been set between Rs 940 and Rs 980 a share. How was the pricing arrived at?
Yashish Dahiya: I think this is what the bankers asked us to price. That is the direction they gave us and we simply said they know best so we just agreed. It is really that simple.
Alok Bansal: We have been talking to a lot of investors over the last two, three months and the combined feedback we received from them was very encouraging and almost pointed towards a particular price band and we thought why do not we go ahead with all the feedback we are receiving from investors plus what our bankers are telling us.
So no frothy IPO valuations?
Yashish Dahiya: We do not know what is frothy and what is not. We have to be guided by what the investors as well as the bankers tell us. We are not experienced enough to set our own valuation without their guidance. So we take that guidance and we just stick with it.
Your fresh issue is much higher than let us say a Nykaa which is going in for an IPO just a few days before. How important is that? What is the feedback that you have received from all the road shows? The retail subscriptions can only be 10% and so how important is the fresh issue?
Yashish Dahiya: I do not know what everybody else’s IPO size is but ours is about $770 million and we are quite comfortable because whatever feedback we received from investors, whatever we have heard from the bankers, the number of investors who have been interested and bid for the anchor book etc. We seem to be in a fairly comfortable position and I think we should be okay.
Alok Bansal: Typically it depends on the sort of supply that investors would want to be a part of the IPO. We had a discussion with all our existing investors and there was almost unanimous decision by everyone that they do not want to sell as a part of the IPO. Soft Bank is selling a small amount of their total holding but apart from that, no one was interested to sell and as we are looking at the future growth plans for the company, for that it is good to have some fresh components as well.
