Policybazaar shares list on exchanges at 17% premium; what should investors do now?

Policybazaar shares were listed at a premium of over 17% on the Bombay Stock Exchange on Monday. The shares of PB Fintech Ltd's Policybazaar opened at Rs 1150, up Rs 170.00, a piece against an issue price of Rs 980 per share. 

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Aayush Agrawal, Sr. Research Analyst - Merchant Banking, Swastika Investmart Ltd.  

"PB Fintech got listed with a gain of 17% in line with our expectations. The company is a leading Fintech firm that aims to enhance its visibility and awareness along with increasing its customer base, which is expected to be beneficial for the company. The existing investors are advised to hold the stock with an SL of Rs1050, while the new investors can look for a dip. We believe the company can perform much better over the long run."

Manoj Dalmia, Founder and Director, Proficient Equities on post listing

"PB Fintech made an opening with Rs 1150 per share, Rs 170 up from issue price of Rs 980.The issue seems overvalued at 46x FY22 Mcap/Sales on a post-issue basis suggesting to book profits . Expect a good demand if earning are positive in the coming weeks."

Earlier, the Rs 5,710-crore initial public offer of PB Fintech Ltd (PBFL), which operates online insurance marketplace Policybazaar and credit comparison portal Paisabazaar, opened for subscription on November 1 and closed on Wednesday November 3, 2021.  

The company has fixed a price band of Rs 940 - 980 per share for this IPO. 

Earlier, talking about the IPO of online insurance marketplace Policybazaar, Zee Business Managing Editor Anil Singhvi had said, "Only risk-taking investors with a long-term view should apply for this IPO." 

Talking about positives of the company, the Zee Business Managing Editor said the company is a market leader in its segment and is backed by good strong growth track record. It also has aggressive growth plans, added Singhvi.   

He said loss-making business and risk of change in regulations may affect this insurance marketplace firm.   

The issue comprised fresh and OFS. Shares for the fresh issue is 3.827 - 3.989 crore shares and OFS is 2- 2.084 crore shares.  

The company will not receive any proceeds from the OFS part of the issue. Of the net proceeds from the fresh issue, Rs 1,500 cr will be used for enhancing the visibility and awareness of its brands, Rs 375 crore will be utilized in funding new opportunities, Rs 600 crore will be used for funding strategic investments and acquisitions and Rs 375 crore will be used to expand business outside India. Residual funds will be used for general corporate purposes. 

The book running lead manager of this IPO are Kotak Mahindra Capital Company Ltd., Morgan Stanley India Company Pvt. Ltd., Citigroup Global Markets India Pvt. Ltd., ICICI Securities Ltd., HDFC Bank Ltd., IIFL Securities Ltd. and Jefferies India Pvt. Ltd.