Tag: pb fintech

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India’s Retail Inflation Eases to 4.25% in May – Top Indian Market Updates

Consumer Price Index

Here are some of the major updates that could move the markets tomorrow:

India’s retail inflation eases to a 2-year low of 4.25% in May

According to the Ministry of Statistics, India’s retail inflation has eased to a two-year low of 4.25% in May 2023, compared to 4.7% in April. Retail inflation is measured by Consumer Price Index (CPI). The Consumer Food Price Index (CFPI) also eased to 2.91% in May from 3.84 % in April. Rural inflation stood at 4.17%, while urban inflation stood at 4.27 %.

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India’s industrial production up 4.2% in April

India’s Index of Industrial Production (IIP) increased by 4.2% in April, up from 1.1% in March 2023 and down from 6.7% in April 2022. The manufacturing sector’s output grew by 4.9% in April 2023 compared to 5.6% a year ago. Power generation declined by 1.1% and mining output rose by 5.1% during the same period.

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Maharashtra Seamless prepays loans worth Rs 234 crore from internal accruals to become debt free

Maharashtra Seamless Ltd used internal accruals to make a voluntary prepayment of Rs 234 crore loan. The repayment aims to make the company debt-free. This is the second time the company has made such a prepayment in the past eight months. As of May 21, 2023, the company’s order book stands at Rs 2,063 crore.

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L&T Finance Holdings plans to expand rural business by offering personal loans

L&T Finance Holdings aims to boost its retail portfolio by offering personal loans and loans against property in rural areas. It is also reducing its wholesale lending book. The lender aims to increase the share of its retail portfolio (which has already reached 75%) to over 80% by 2026. It plans to introduce rural Loan Against Property (LAP) loans and personal loans for the spouses of women microfinance borrowers to strengthen its presence among bottom-of-the-pyramid customers.

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PTC Industries to spend ₹300 crore on capacity expansion

PTC Industries Ltd intends to allocate ₹300 crore for capacity expansion in the next few years. Its goal is to generate up to two-thirds of its revenue from the domestic defence aerospace sector in the medium term. The company specializes in engineering components for critical applications. Over the past few years, the company invested around ₹300-₹350 crore in developing technology and capabilities.

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NCLT adjourns the Wilmington Trust insolvency plea against SpiceJet

The National Company Law Tribunal (NCLT) adjourned the petition filed by aircraft lessor Wilmington Trust SP Services (Dublin) Ltd for initiating the corporate insolvency resolution process. The matter is expected to be listed on July 16. This is the third case filed by the company against the airline, with two other cases filed by Aircastle (Ireland) Ltd and Willis Lease Finance Corporation. Aircastle’s petition is listed for July 17.

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India’s domestic air passenger traffic up by 2.3% in May

According to ICRA, the domestic air passenger traffic was estimated at 131.8 lakh in May, about 2.3% higher than 128.9 lakhs in April 2023. Further, it witnessed a 15% YoY growth of about 15%, compared to May 2022. Domestic passenger traffic in May 2023 was higher by about 8% compared to the pre-Covid levels (that is, May 2019). The airlines’ capacity deployment in May 2023 was higher by 1.4%  than that of May 2022, reaching the pre-Covid levels (May 2019).

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Jaguar Land Rover plans annual investment of 3 billion pounds by FY26

Tata Motors-owned Jaguar Land Rover plans an annual investment of 3 billion pounds while targetting revenue of over 30 billion pounds by FY26. The luxury carmaker expects to have revenue of over 28 billion pounds in FY24. Under its ‘Reimagine’ strategy, JLR had aimed to become a more agile business with a simplified manufacturing operation and an ambition to achieve a positive cash net of debt by 2025.

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IndiGo co-founder’s family likely to sell stake worth up to ₹7,500 crore: Report

According to a CNBC-TV18 report, the family of IndiGo’s co-founder Rakesh Gangwal is likely to sell a 5-8% stake in the Indian airline’s parent InterGlobe Aviation Ltd, which is worth up to ₹7,500 crore. Rakesh Gangwal and his wife, Shobha Gangwal, hold 13.23% and 2.99%, respectively, in InterGlobe as of March 31, 2023.  Their Chinkerpoo Family Trust holds a 13.5% stake in the airline.

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PB Fintech to wipe out accumulated losses in next four years

PB Fintech, the parent firm of Policybazaar, expects to wipe out accumulated losses in the next four years on the back of revenue growth. The total revenue of the company increased from Rs 1,200 crore in FY22 to Rs 1,710 crore in FY23. A top official said the company would be Rs 400-500 crore cash positive, and there may not be any need for additional capital infusion.

Read more here.

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Coal India’s Net Profit Jumps 106% YoY to ₹6,044Cr in Q2 – Top Indian Market Updates

Here are some of the major updates that could move the markets tomorrow:

Coal India Q2 Results: Net profit jumps 106% YoY to ₹6,044 crore

Coal India Ltd (CIL) reported a 106% year-on-year (YoY) jump in consolidated net profit to ₹6,043.55 crore for the quarter ended Sept (Q2 FY23). Its revenue from operations rose 28% YoY to ₹29,838 crore during the same period. CIL’s total expenses stood at ₹23,770 crore in Q2, up 16.3% YoY. The company’s board has declared an interim dividend of ₹15 per share.

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Vehicle sales rises over 47% in October: FADA

A report by the Federation of Automobile Dealers’ Association (FADA) revealed that retail sales of vehicles in India rose 47.62% YoY to 20.94 lakh units in October 2022. Sales were higher by 8.32% compared to the pre-covid month of October 2019. Retail sales of two-wheelers rose 51% YoY to 15.71 lakh units, while that of commercial vehicles rose 25.4% to 74,443 units last month.

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Divi’s Labs Q2 Results: Net profit falls 19% YoY to ₹494 crore

Divi’s Laboratories Ltd reported an 18.6% YoY decline in consolidated net profit to ₹493.6 crore for the quarter ended Sept (Q2 FY23). Its revenue from operations fell 6.7% YoY to ₹1,854.54 crore during the same period. The pharma company’s EBITDA stood at ₹621 crore in Q2, down 24% YoY. Total expenses rose 5.81% YoY to ₹1,319.4 crore.

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Voltas to invest ₹1,000 crore for capacity expansion

Voltas will invest over ₹1,000 crore to expand its manufacturing capacity and establish a new plant near Chennai, said MD Pradeep Bakshi. Meanwhile, the proposed ₹500-crore compressor plant in partnership with China’s Highly International is yet to receive government clearance. The investments will help Voltas ensure its leadership status in ACs and commercial refrigeration.

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Ujjivan SFB Q2 Results: Net profit at ₹294 crore

Ujjivan Small Finance Bank (SFB) reported a net profit of ₹294 crore for the quarter ended Sept (Q2 FY23). It posted a net loss of ₹274 crore in Q2 FY22. The company’s total income rose 63% YoY to ₹1,139.83 crore in Q2 FY23. The bank registered strong disbursements at ₹4,866 crore in Q2, up 56% YoY.

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Brookfield India REIT leases over 3.06 lakh sq ft office space in Q2

Brookfield India Real Estate Trust has leased over 3.06 lakh sq. ft. office space in the second quarter, taking its total leasing to over 6 lakh sq. ft. in the first half of FY23 as the demand for office spaces continues to rise. It has also signed an expansion option of 16,000 sq. ft. in its property Candor Tech Space N1. The REIT has increased its adjusted net operating income by 48% YoY ₹241.3 crore in Q2.

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CEAT Q2 Results: Net profit falls 81% YoY to ₹7.8 crore

Ceat Ltd reported an 81% YoY decline in net profit to ₹7.83 crore in Q2 FY23, mainly due to higher input costs. Its revenue from operations rose 18% YoY to ₹2,894 crore during the same period. The tyre manufacturer’s total expenses stood at ₹2,864 crore in Q2, up 19.3% YoY. EBITDA fell 7.8% YoY to ₹202 crore.

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30 IndiGo aircraft grounded due to supply chain disruptions

Nearly 30 IndiGo aircraft have been grounded due to supply chain disruptions. The airline is evaluating wet leasing of planes and other options to boost operations. The company said it is actively engaged with various partners to work on mitigation measures that would ensure the continuity of its network and operations. At the end of September, the IndiGo had 279 aircraft in its fleet.

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Jio and Airtel add 3,500 5G sites per week in ramp up

Reliance Jio and Bharti Airtel are adding around 3,500 sites per week cumulatively, as they ramp up their 5G network rollout. Both telcos are set to further scale up site additions to 9,000-10,000 per week combined in the coming 3-4 months as equipment becomes easily available with more domestic production of radios. While Reliance Jio plans to cover the entire country with 5G by December 2023, Bharti Airtel aims to do so by March 2024.

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PB Fintech Q2 Results: Net loss narrows to ₹187 crore

PB Fintech Ltd (Policybazaar) reported a net loss of ₹197 crore for the quarter ended Sept (Q2 FY23). It posted a net loss of ₹204.4 crore in Q2 FY22. The company’s revenue from operation jumped 105% YoY to ₹573.47 crore in Q2 FY23. Insurance premiums stood at ₹2,545 crore in Q2, up 79% YoY. The company delivered 34% growth in health insurance premiums and 29% in life insurance new business premiums.

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Tata Steel Announces Mega Merger – Top Indian Market Updates

Here are some of the major updates that could move the markets on Monday:

Seven metal companies of Tata Group to be merged with Tata Steel

Tata Group announced the merger of seven of its metal companies into Tata Steel to drive efficiencies and reduce costs. Tata Steel Long Products, Tinplate Company Of India, TRF, Indian Steel & Wire Products, Tata Steel Mining, and S&T Mining will be amalgamated into their parent company Tata Steel Ltd. The resources of the merged entities can be pooled to unlock the opportunity for creating shareholder value.

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CIL to sign pacts with BHEL, IOCL to set up four coal gasification projects

Coal India Ltd (CIL) will sign agreements with Bharat Heavy Electricals Ltd (BHEL), Indian Oil Corporation Ltd (IOCL), and GAIL to set up four surface gasification projects. Through the gasification process, coal is converted into syngas (a fuel gas), which can be used in downstream production of value-added chemicals. The government aims to achieve 100 million tonnes of coal gasification in the next eight years to reduce crude oil imports.

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Sterling and Wilson Solar to set up solar plants in Nigeria

Sterling and Wilson Solar Solutions (SWSS) and its partner Sun Africa have signed an agreement with the Nigerian government to set up solar power plants aggregating 961 megawatt-peak (MWp). The plants and battery energy storage systems with a total installed capacity of 455 MWh will be set up at five different locations in Nigeria. SWSS is a US-based subsidiary of Sterling and Wilson Solar Ltd.

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Mahindra Group, BII commit $500 million for electric SUV space

Mahindra Group and British International Investment (BII) have committed $500 million (over ₹4,000 crore) for the electric sports utility vehicle space. BII has also announced an investment of $250 million in the group’s electric vehicle venture ‘EV Co’. Earlier this month, Mahindra unveiled its first electric SUV (XUV 400), which it plans to launch in early 2023.

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Reliance New Energy acquires 20% stake in Caelux for $12 million

Reliance New Energy Ltd (RNEL) has signed a definitive agreement to acquire a 20% stake in California-based Caelux Corporation for $12 million (~₹ 97.25 crore). Caelux is an industry leader in the research and development of perovskite-based solar technology. Its proprietary technology enables high-efficiency solar modules that can produce 20% more energy over the 25-year lifetime of a solar project at significantly lower installed cost.

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Glenmark Pharma, Bausch Health gets approval for RYALTRIS in Canada

Glenmark Pharmaceuticals and Bausch Health announced that RYALTRIS (a nasal spray) has received approval from Health Canada for the symptomatic treatment of moderate to severe seasonal allergic rhinitis (SAR) and associated ocular symptoms. SAR (or hay fever) is an inflammatory condition of the upper airways that occurs in response to exposure to airborne allergens (typically tree, grass, and weed pollens) in sensitized people.

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Manappuram Finance accepts rights issue proposal of Asirvad Microfinance

The Board of Directors of Manappuram Finance has accepted the rights issue proposal of its subsidiary, Asirvad Microfinance Ltd. The Kerala-based company said it is entitled to purchase 90.96 lakh shares at ₹268 per share. The board approved subscription to the rights issue of up to 93.28 lakh shares having a value of ₹250 crore (approx).

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Rupee hits record low against US Dollar

The Indian Rupee (INR) fell 41 paise to an all-time low of 81.20 against the US dollar in early trade today as US Treasury yields rose to fresh multi-year highs and dollar demand from importers. On Thursday, INR suffered its biggest single-session percentage decline since February due to a lack of aggressive intervention by the Reserve Bank of India (RBI) and a hawkish interest rate outlook by the US Federal Reserve.

Traders have asked for the central bank’s intervention to contain INR’s rapid fall.

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Proxy advisor flags governance concerns at PB Fintech

Proxy advisory firm Stakeholders Empowerment Services (SES) has raised certain corporate governance issues at PB Fintech Ltd regarding its amalgamation with Makesense Technologies and grant of stock options. SES has asked shareholders to seek clarification from the company as to why it initially proposed the amalgamation, then withdrew the application, and why it is being proposed again now.

PB Fintech is the parent company of Policybazaar, a one-stop platform for all types of insurance products.

Read more here.

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Tech Mahindra to Acquire 100% Stake in Allyis Group – Top Indian Market News

Tech Mahindra to acquire 100% stake in Allyis India, Green Investments

Tech Mahindra Ltd has approved a proposal for the acquisition of a 100% stake in Allyis India and Green Investments. The total consideration for the acquisition is $125 million (~Rs 929 crore). Allyis offers technology consulting and managed services that help organizations reduce costs and improve performance. The target entity is headquartered in Seattle, USA, and has more than 660 employees. 

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GST Council defers hike on textiles from 5% to 12%

The Goods and Services Tax (GST) Council has decided to defer the rate hike on textiles from 5% to 12%. The issue will be reviewed at the next meeting in February 2022. Various states had opposed the increase in the tax, citing higher compliance costs for the unorganised sector and micro, small, & medium enterprises (MSMEs). They have also claimed that it will make the ‘poor man’s clothing expensive’.

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SBI to acquire 10% stake in India International Clearing Corporation

State Bank of India (SBI) will acquire a nearly 10% stake in India International Clearing Corporation (IICC). IICC is the first international clearing corporation set up at GIFT-IFSC that acts as a central counterparty providing clearing and settlement and risk management services. It clears and settles index and single stock derivatives, currency derivatives, and debt securities. SBI is expected to acquire a 9.95% stake, subject to a maximum investment of Rs 34.03 crore.

Read more here. 

Cadila Healthcare’s US arm gets USFDA approval to market Pimavanserin capsule

Zydus Pharmaceuticals (USA) Inc. has received tentative approval from the US Food & Drug Administration (USFDA) to market generic Pimavanserin capsules. The drug is used to treat hallucinations and delusions associated with Parkinson’s disease psychosis. It will be manufactured at Cadila Healthcare’s formulation manufacturing facility at Special Economic Zone (SEZ), Ahmedabad.

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FMCG distributors in Maharashtra to boycott HUL products from Jan 1

The Maharashtra Consumer Products Distributors Federation has decided to stop supplying Hindustan Unilever Ltd’s (HUL) kissan range of products from January 1 due to the company’s “refusal to engage with them on their concerns”. A section of bulk dealers and stockists warned of halting the supply of the HUL’s products over better terms offered to large and online peers. HUL said it remains committed to ensuring that distributors earn a fair return on investments. 

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CBI conducts raids at official and residential premises of Dilip Buildcon

A Central Investigation Bureau (CBI) team on Friday conducted raids at officials and residential premises of Dilip Buildcon Ltd (DBL) in Bhopal. The action came after CBI caught an executive director of the company three days ago while trying to give a bribe of Rs 20 lakh to an official of the National Highway Authority of India (NHAI). A senior CBI officer confirmed that five persons, including the Regional Officer of NHAI Bangalore and three officials of DBL, have been arrested.

IDFC First Bank board approves merger with promoter entities

The Board of Directors of IDFC First Bank has favoured the merger of IDFC and IDFC Financial Holding (promoter group) with the bank. The bank’s board has constituted and authorised a Capital Raise and Corporate Restructuring Committee to work on the terms of the proposed merger, including finalising the scheme, valuation, and hiring advisors. IDFC Financial Holding Company Ltd (IDFC FHCL) holds a 36.52% stake in the bank as of September 2021, while IDFC Holds a 100% stake in IDFC FHCL.

Read more here.

PB Fintech to invest up to Rs 1,000 crore in two subsidiaries

PB Fintech Ltd has approved an investment of up to Rs 700 crore in subsidiary Policybazaar Insurance Brokers Private Ltd during FY22 and FY23. It has also approved an investment of up to Rs 299.99 crore in subsidiary Paisabazaar Marketing and Consulting Private Ltd. The investments will allow both the companies to strengthen their financial health and meet general operating expenses.

Read more here.

Government sets up multiple task forces for 6G development

The Department of Telecommunications (DoT) has formed as many as six academia-driven task forces under the Technology Innovation Group (TIG) on sixth-generation or 6G technology. DoT mandated immediate deliverables by March 31, 2022, including mapping of 6G activities and capabilities worldwide and a white paper on India’s competencies, including research and pre-standardisation activities.

Read more here.

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Policybazaar IPO: All You Need to Know

With Diwali just around the corner, multiple companies are lining up to launch their IPOs. PB Fintech Ltd., the parent company of online platforms Policybazaar and Paisabazaar, has launched its IPO today— Nov 1. The issue is the biggest and most popular among the three IPOs hitting the primary market today. Let us take a closer look into the company and learn more about its IPO.

Company Profile – PB Fintech Limited

PB Fintech Ltd (PBFL) operates the largest online platform for insurance and lending products in India. The company provides easy access to insurance and credit (loan) products among Indian households. Through a consumer-centric approach, PBFL enables research-based purchases of insurance and lending products in a transparent manner. It also allows insurers and lending partners to design customised products for customers by leveraging PBFL’s extensive data analytics capabilities.

Policybazaar  

PBFL’s flagship platform, Policybazaar, allows users to compare and buy insurance plans. It is India’s largest digital insurance marketplace with a 93.4% market share based on the total number of policies sold (as of FY20). In the previous financial year (FY21), the platform constituted 65.3% of all digital insurance sales in India based on the number of policies sold. Policybazaar had over 12.65 crore visits in FY21 and 2.7 crore visits in Q1 FY22. 

Currently, 48 insurer partners offer 390 term, health, motor, home, and travel insurance products on the platform. The company’s technology solutions are focused on automation and self-service-driven consumer experiences. Policybazaar receives a percentage of commission from its insurer partners. Moreover, it also generates income from telemarketing, sales and post-sales, account management, and premium-collection services.

Policybazaar is registered with and regulated by the Insurance Regulatory and Development Authority of India (IRDAI) as a direct (life and general) insurance broker.

Paisabazaar

PB Fintech facilitates borrowing through its Paisabazaar platform. It has partnered with 54 large banks, non-bank, and fintech lenders to offer personal loans, business loans, home loans, credit cards, and loans against property. Paisabazaar receives a commission from the lending partners listed on its platform. It also obtains revenue from credit advisory and related services that are offered to consumers and lenders. As of FY21, Paisabazaar is the largest digital consumer credit marketplace in India, with a market share of 53.7%. The platform is also widely used to access credit scores.

Additionally, PB Fintech generates revenue from online marketing, consulting, and technology services to insurers and lending partners.

About the IPO

PB Fintech’s public issue opens on November 1 and closes on November 3. The company has fixed Rs 940-980 per share as the price band for the IPO. 

The fresh issue of shares (of the face value of Rs 2 each) aggregates to Rs 3,750 crore. The offer for sale (OFS) from existing shareholders aggregates to Rs 1,875 crore. Individual investors can bid for a minimum of 15 equity shares (1 lot) and in multiples of 15 shares thereafter. You will need a minimum of Rs 14,700 (at the cut-off price) to apply for this IPO. The maximum number of shares that can be applied by a retail investor is 195 equity shares (13 lots). 

PBFL will utilise the net proceeds from the IPO for the following purposes:

  • An amount of Rs 1,500 crore towards enhancing visibility and awareness of the company’s brands, including Policybazaar and Paisabazaar.
  • Rs 375 crore for new opportunities to expand growth initiatives and increase the company’s consumer base.
  • Funding strategic investment and acquisitions – Rs 600 crore
  • Expanding its presence outside India – Rs 375 crore
  • General corporate purposes

Financial Performance

PB Fintech has posted negative earnings till date. However, we can see that its losses are decreasing over the past few years. The company posted a net loss of Rs 150.24 crore for the financial year 2020-21, which is lower compared to a loss of Rs 304.03 crore seen in FY20. Meanwhile, revenue from operations rose 11.9% YoY to Rs 957.41 crore in FY21. The expenditure on advertising and promotional activities is high. The company may continue to incur losses in the future as they are focusing extensively on the growth of their business.

PBFL has posted negative cash flows from operating, investing, and financing activities over the past few years. Cash outflows over extended periods could affect the company’s ability to undertake its day-to-day operations and implement growth strategies.

Risk Factors

  • PBFL has a history of losses and anticipates increased expenses in the future.
  • The company may be unable to retain existing customers or attract new customers if the insurers or lending partners fail to offer insurance or credit products in sync with the evolving needs of consumers.
  • The failure to maintain and enhance PB Fintech’s brand recognition or reputation could adversely affect its business and financial performance. 
  • The company operates in the dynamic and highly competitive fintech landscape, which makes it difficult to predict future prospects.
  • PBFL may not be able to ensure the accuracy of product information and the effectiveness of its recommendation of insurance products on its platform.
  • The insurance broking business is subject to strict laws and regulations. The inability to comply with such norms could severely harm its overall operations.

IPO Details in a Nutshell

The book-running lead managers to the public issue are Citigroup Global Markets India, HDFC Bank, ICICI Securities, IIFL Securities, Jefferies India, and Morgan Stanley India. PB Fintech Ltd had filed draft papers for its IPO in November 2020. You can read it here.

Ahead of the IPO, PBFL was able to raise Rs 2,569 crore from anchor investors. The marquee investors include Fidelity, BlackRock, Dragoneer Group, HDFC Life, Bajaj Allianz Life, etc.

Conclusion

PB Fintech’s Policybazaar and Paisabazaar platforms address the highly underpenetrated online insurance and lending markets in India. The company has an asset-light capital strategy and does not underwrite any insurance or retain any credit risk on its books. As per a report from consulting firm Frost & Sullivan, the Indian insurance market is expected to grow at a CAGR of 17.8% to reach Rs 39 lakh crore by FY30. Despite heavy competition, PB Fintech could benefit from the growth in this sector, provided that they improve their offerings. Their focus on increasing consumer reach and boosting digital & technological infrastructure entails strong long-term growth prospects. They plan to expand and replicate platforms for small and medium enterprises (SMEs) and corporate clients.

Due to oversubscription and a favourable grey market premium (GMP), investors of the IPO could receive good listing gains. PBFL’s shares are available at a GMP of Rs ~150 in the grey market today. As always, do consider the risks associated with the company and come to your own conclusion.

What are your views on this IPO? Will you be applying for it? Let us know in the comments section of the marketfeed app.