The public issue of PB Fintech, which owns Policybazaar and Paisabazaar platforms, has seen a subscription of 54 percent on November 1, the first day of bidding, as it received bids for 1.85 crore equity shares against an offer size of 3.45 crore equity shares, as per exchange data.
Retail investors have put in bids for 118 percent shares against the reserved portion.
A part set aside for non-institutional investors was subscribed 6 percent and that of qualified institutional buyers saw 56 percent subscription.
Also read - Policybazaar IPO opens: 10 key things to know about the issue, company
Insurance aggregator Policybazaar, the professionally management firm, aims to raise Rs 5,700 crore through the IPO that comprises a fresh issue of Rs 3,750 crore and an offer-for-sale of Rs 1,960 crore by selling shareholders, including SVF Python II (Cayman). The company mopped up Rs 2,569 crore from anchor investors on October 29.
“We like the company’s focus on growth, willingness to do more experiments, while focusing on the core business, international expansion and inorganic growth plans,” said KRChoksey, adding that over the years, Policybazaar has raised around $400 million and it has 60-65 percent cash on books which will help in expansion and consumer acquisition.
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Considering multiple growth drivers and leadership position of Policybazaar in the digital ecosystem, investors should look to invest in the IPO for listing as well for long-term gains, the brokerage advised.
Policybazaar’s revenue averaged a two-year counded growth rate of more than 34 percent (FY19-FY21). The growth has been largely driven by its presence in a growing ecosystem, increasing penetration and awareness for financial products, a robust platform led by proprietary technology, strong management pedigree and brand pull, besides strong relationship with insurers, lenders and repeat purchases from existing customers, KRChoksey said.
The company primarily generates its revenue from commission and additional services, and from providing online marketing, consulting and technology services to insurers and lending partners.
PB Fintech has built India’s largest online platform for insurance (Policybazaar) and lending products (Paisabazaar), leveraging the power of technology, data and innovation.
The net proceeds from the fresh issue will be utilised for enhancing visibility and awareness of its brands (Policybazaar and Paisabazaar) (Rs 1,500 crore), new opportunities to expand consumer base including offline presence (Rs 375 crore), strategic investments and acquisitions (Rs 600 crore), and expanding presence outside India (Rs 375 crore), besides general corporate purposes.
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