Policybazaar gains after SoftBank reduces stake via block deal; stock down 50% from IPO price - Should you buy?

Policybazaar Share Price: Shares of new-age company PB Fintech, which runs the insurance aggregator platform Policybazaar, jumped around 6 per cent intraday on Friday, December 2, on the back of a block deal. Japanese conglomerate SoftBank Group Corp offloaded 5 per cent stake in the company via a block deal. 

The buying trend in the stock, however, reversed immediately as a result of profit booking in the stock and overall domestic markets. At 11:05 AM, the scrip traded in green to quote Rs 470 apiece on NSE.

Market analyst Sandeep Jain said that those holding shares of PB Fintech must exit on the bounce.

"I would recommend that those holding shares of PB Fintech must exit on the bounce. Anything around Rs 550-600 is good to exit. The company has been backed by SoftBank and this is the only good thing about it. Now even SoftBank has reduced its stake," Jain told Zee Business. 

According to a Zee Business channel report, SoftBank sold 2.28 crore shares or 5.1 per cent stake in the company. Before today's stake sale, SoftBank held 10 per cent stake in the company. The transaction was executed at Rs 440 per share. 

SoftBank had invested $199 million in the Policybazaar. The Japanese investment firm offloaded stock worth $250 million in its IPO.

Policybazaar IPO Details

PB Fintech IPO had made its stock market debut in November last year at a premium of nearly 17 per cent from the IPO issue price of Rs 980 per share. The stock is currently trading at a discount of nearly 50 per cent from the IPO issue price and 65 per cent from all-time high. The stock's 52-week range is Rs 1,235.30 - Rs 356.20.

PB Fintech has seen stake selling by pre-IPO investors after the lock-in expired last month. According to NSE data, American investment major Tiger Global Eight Holdings and Priyasha Meven Finance on November 11 sold 32,84,422 and 24,20,500 shares at Rs 388.34 and Rs 383.51, respectively.

PB Fintech has yielded a negative return of around 30 per cent in the past 6 months. It has tumbled 50 per cent YTD and 61 per cent in the past one year.

The company claims to be the country's largest digital insurance marketplace.

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