PB Fintech is expected to make its Dalal Street debut on November 15, Monday, along with Sigachi Industries and SJS Enterprises.
The grey market premium for PB Fintech shares took a U-turn to Rs 110-120 apiece from Rs 20-25 a day earlier. However, this was merely 10-15 per cent above its issue price of Rs 980 per share.
Other than the positive sentiments, dealers attributed this turnaround to the improved sentiments and long-term prospects of the company. However, they were still concerned over the expensive valuation.
Abhay Doshi, co-founder, UnlistedArena, said despite higher valuations, one could expect another new-age startup to make a decent listing on the bourses. “The company is well placed in their segment. Insurance is highly underpenetrated in India, leaving a wide room for growth,” he added. “It is also the leader in the sector.”
The IPO of PB Fintech has raised some uncomfortable questions over the valuation. That could be why several brokerages have recommended investors to skip this loss-making startup.
Vishal Balabhadruni, BFSI Analyst at CapitalVia Global Research, said financial literacy was growing in the country and this would improve the prospects of PB Fintech. “The company has narrowed its losses and profitability may not be farther away,” he added. “The issue seems to be good for the short term or listing gains, but long-term investors must be cautious.”
The Rs 5,625-crore IPO of PB Fintech, which opened for subscription in November 1-3, was subscribed 16.59 times, thanks to the solid interest of institutional buyers. The portion for qualified institutional buyers was subscribed 24 times, whereas the non-institutional buyers portion attracted 7.82 times bid. Retail investors’ portion received 3.31 times bidding.
Policybazaar and Paisabazaar command more than 90 per cent and 51.4 per cent market share, respectively. The company wants to have a physical presence through outlets. The asset-light model is generating strong renewal business for it at a low acquisition cost. This would increase on account of convenience, affordability and time-saving provided by the platforms, said Mayank Kaushik of Trustline Securities.
