Policybazaar operator PB Fintech Ltd (PBFL) Initial Public Offering (IPO) is the biggest and most talked about three IPOs to hit the primary market this week. Policybazaar’s IPO got 1.59x subscriptions on the second day of bidding. According to National Stock Exchange (NSE) data, applications were received for 5,47,59,750 shares against 3,45,12,186 shares in PB Fintech Limited’s maiden offer. The portion set aside for retail investors was booked 2.04 times. Qualified Institutional Buyers (QIBs) and Non-Institutional Investors (NIIs) had subscribed 2.08 times and 0.23 times, respectively. The company has fixed a price band of Rs 940-980 per equity share. The last chance for investors to invest in Policybazaar’s IPO will be on Wednesday, November 3.
Most of the analysts suggest membership rating for Policybazaar IPO for listing advantage. However, some questioned the high valuation. Let’s take a look at Policybazaar’s IPO and whether investors should give it a chance or not.
Policybazaar IPO Issue Price & Details
PolicyBazaar was India’s largest digital insurance marketplace among all online insurance distributors, with a market share of 93.4 percent based on the number of policies sold in FY20. Analysts believe that the huge popularity of the e-insurance platform had prompted the operator to come out with an IPO. The company is planning to raise Rs 5,700 crore through its IPO, which includes a fresh issue of Rs 3,750 crore and an offer for sale of Rs 1,960 crore. The offer for sale includes sale of shares worth Rs 1,875 crore by investor SVF Python II (Cayman) and shares by Yashish Dahiya, Alok Bansal, Founder United Trust, Shikha Dahiya and Rajendra Singh Kuhar for a cumulative Rs 85 crore. The price band for the offer has been fixed at Rs 940-980 per equity share. PB Fintech has already raised Rs 2,569 crore from anchor investors ahead of the IPO on October 29.
Policybazaar IPO Valuation
On valuations, Motilal Oswal Retail Research said, “The issue is valued at 46.3x FY22 Mcap/Sales post issue and on an annualized basis, which seems expensive as compared to global peers. However, given the leadership position in both the digital insurance or consumer credit market and the customer-centric approach, the issue is likely to attract investor interest. At the same time, the losses in Policybazaar are reducing while Paisabazaar has become profitable. In the current environment, the market is liking the emerging platform stories which are well poised to tap the high growth digital/online penetration in the insurance/consumer credit market. That’s why we recommend ‘subscribing’ from the point of view of listing gain.”
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