Policybazaar to raise Rs 5,710 cr via IPO, issue opens today - 10 things to consider

PB Fintech Ltd (PBFL), which operates online insurance marketplace Policybazaar and credit comparison portal Paisabazaar is coming up with an IPO to raise around Rs 5,710 crore, which opens on Monday and closes on Wednesday (3rd November 2021). 

The issue is a combination of fresh and OFS. 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.

Here are Top 10 things to know from the Red Herring Prospectus of Policybazaar's IPO:

1) Price Band: The issue is through the book-building process with a price band of Rs 940 - 980 per share. The face value is at Rs 2

2) Shares for the fresh issue: Shares for the fresh issue is 3.827 - 3.989 cr shares; Shares for OFS is 2.000 - 2.084 cr shares

3) Fresh issue size: Fresh issue size is Rs 3,750 cr; OFS issue size is Rs. 1,958.6 - 1,959.7cr

4) Total issue size: Total issue size is 5.826 - 6.073cr shares, which is Rs 5,708.6-5,709.7 crore

5) Bidding date: The issue will open on 1st Nov. 2021 and close on 3rd Nov. 2021. MCAP at higher price band Rs 44,051cr; Enterprise value at higher price band at Rs 38,425 cr

6) Book running lead manager: 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.

7) Promoters:  The company is a professionally managed company and does not have an identifiable promoter.

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8) Company's market: In terms of total premium across life and non-life insurance, the market for insurance products in India is estimated to be Rs 7.6tn (USD 102bn) in FY20 and is expected to grow to Rs 39tn (USD 520bn) by FY30, growing a 17.8% CAGR.

9) Investors: Backed by marquee investors like SoftBank, Themasek, Tiger Global, Premji Invest, PBFL operates India’s largest online insurance marketplace Policybazaar (launched in 2008) and credit comparison portal Paisabazaar (launched in 2014). Both Policybazaar and Paisabazaar platform offerings address the large and highly underpenetrated online insurance and lending markets in India.

10) Financial Results: On the back of a 39.9% CAGR rise in the income from the insurance business over FY19-21, PBFL reported a 34.2% CAGR rise in consolidated revenue to Rs. 886.7cr in FY21. Business contribution from insurance, credit and others segment stood at 68.5%, 6.5% and 25%, respectively, in FY21 as compared to 63%, 17.6% and 19.4% in FY19. During FY19-21, total premium sourced from the platform increased by 42.5% CAGR, while mainly due to lower disbursal in the pandemic year (FY21) total credit disbursal declined by 24.4% CAGR.

(Disclaimer: The views/suggestions/advices expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)