PB fintech Ltd. is one of India’s largest online platforms for insurance and lending products leveraging the power of technology, data, and innovation. Within a decade, with the rise in digitization PB fintech took the advantage of technological advancement of the country.
The initial public offering of the parent firm PB fintech, of the online insurance aggregator Policy Bazaar, opened its IPO on 1st November to raise a whopping amount of Rs5710 crores. The IPO consists of the fresh issue of equity shares worth Rs3,750 crores and an offer for sale by existing shareholders of Rs 1,960crores.
The window to apply for IPO will open on 1st November and will close on 3rd November. The basis for the allotment is due on 10th November 2021 and the shares will finally be credited to the Demat account on 12th November. Shares will be listed on both NSE and BSE on 15th November.
The price band for the share is Rs940-Rs980., having a face value of RS2 per share. 75% of the total offer is reserved for qualified institutional investors and 15% for noninstitutional buyers, and only 10% for retail investors. Retail investors can invest a minimum of Rs14700, i.e 1 lot of 15 shares, and a maximum of Rs1,91,100 i.e 13 lots of 195 shares% for the retail investors.
The company will not be receiving any proceed from the offer for sale. However, the proceeds from the fresh issue will be utilized for enhancing the visibility and awareness of its brands. For the same, the company in DHRP has mentioned a fund of Rs1500 crores to be utilized. Further Rs375crores has been allocated to the new opportunities to expand consumer base including offline presence. For strategic investments and acquisitions, Rs 600crores from the proceeds of fresh issues will be utilized. Last but not least Rs 375crores will be used for expanding presence outside India.
PB fintech work on an asset-light strategy and it launched Paisa Bazaar and Policy Bazaar, to provide lending products and Insurance products respectively. The firm has leveraged the power of technology, data, and innovation. As per the reports of FY2021, Policy Bazaar became the largest digital insurance marketplace, based on several policies sold, among all online insurance distributors with a 93.4% market share.
In 2014, for providing lending products, the firm launched its second subsidiary name Paisa Bazaar, lending products As per the latest reports it has become the largest digital consumer credit marketplace, with a market share of a whopping 53.7%. despite a diverse and huge client base and being a leader in their respective segment, PB fintech reported a loss of Rs 150.24 crore for the financial year FY21. However, revenue from the operation grew to Rs 886.66 crore in FY21, up from Rs 771.3 crore in FY20, registering a 15% growth rate.
After making losses for the continuous losses years, the firm manages to get a nod from SEBI to float the IPO only because of its huge client and customer base. Thus applying for IPO may give you gain of listing, but holding on to the stock, will be much better.
But the client must certainly do their thorough homework before investing in IPO. As everything traded in the market are subject to market risk, which can’t be avoided. Thus be an informed investor and create wealth.