on Oct 28, 2021)Mumbai: PB Fintech, the holding company for online insurance distributor Policybazaar and loan comparison portal Paisabazaar, has fixed a price band of Rs 940 to Rs 980 for its Rs 5,710-crore initial public offering (IPO), which will open on November 1. The pricing gives the company a valuation of between Rs 44,250 crore and Rs 46,125 crore ($5.9-6.2 billion). This values the firm at more than the Rs 25,923-crore market cap of — the country’s largest non-life insurer.
The IPO comprises a fresh issue of Rs 3,750-crore equity shares and an offer for sale (OFS) of about Rs 1,960 crore by existing shareholders. As part of the OFS, SoftBank (SVF Python II – Cayman) will sell shares worth Rs 1,875 crore. SoftBank will sell up to a quarter of the nearly 16% stake it holds in the company.
The founders will also sell shares of around Rs 58 crore in the IPO. The proceeds from the IPO will be used for funding strategic investments and acquisitions, expanding presence outside India and general corporate purposes.
Policybazaar, which started out as a comparison website that generated leads for insurance companies, has evolved into a platform that allows users to search, buy, renew and lodge claims. After receiving an insurance broking licence, the company has expanded its offline presence for distribution.
“We have got 12.6 crore annual visits, which is significant considering that we are not an entertainment website,” said Policybazaar founder Yashish Dahiya. According to him, the protection gap in India (gap between required sum insured and total sum insured) is 83% compared to 70% in China and 48% in the US, and 63% of payments for healthcare are made out of pocket.
“The total sum insured from our policies in FY21 was Rs 7 lakh crore and the premium was Rs 4,701 crore from 48 insurance partners,” said Dahiya. In terms of revenue, it is bigger than several insurance companies. Besides the insurance vertical, the company distributes loans through Paisabazaar in partnership with 56 banks and fintech firms.
Dahiya said that while Policybazaar would work closely with insurance companies the focus would be on the consumer and it would continue to uphold its ethos, which was to bring transparency into the market. “Of our global investors, besides Intel Cap, none of them have exited the company. All investors are firmly staying invested,” said Dahiya. He added that given the growth potential in India, the company would not be a mature business even after five years.
