IPO Alert - PolicyBazaar IPO opens in November

As online lending and insurance marketplace goes public, here are all the details you might want to know

PolicyBazaar IPO Launch Date Announced

As an online insurance aggregator, PolicyBazaar is a well-recognised brand in India. Its legal entity, PB Fintech, will be opening up its gates for public investment very soon. The parent company of PaisaBazaar, PB Fintech’s IPO is opening for applications from 1 November 2021. This was confirmed in an exchange notification on the Bombay Stock Exchange on 26 October 2021. A decent buzz can be expected around that time in the financial market as PolicyBazaar goes public.

The PolicyBazaar IPO will be open for application from 1 November and close on 3 November 2021. The plan for listing the shares in the stock market is on 15 November 2021. The company had earlier filed the Draft Red Herring Prospectus with SEBI back in August 2021.

The shares will have a price band of Rs 940-980 and over Rs. 5709 crore is expected to be raised through the IPO. This will include a fresh issue of Rs 3750 crore and an offer for sale of Rs 1959 crores. This will have over 6.07 crore shares of a face value of Rs 2 each.

The book running lead managers for the IPO are Kotak Mahindra Capital, Morgan Stanley, Citigroup Global, ICICI Securities, HDFC Bank, IIFL Securities and Jefferies. 

The firm plans to use the raised funds to further enhance its brands PolicyBazaar and PaisaBazaar.  

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What are the businesses of PolicyBazaar and PaisaBazaar?

PolicyBazaar is an online marketplace for insurance. If you have bought insurance policies in the recent past, the chances are that PolicyBazaar may have popped up in your online search results. PolicyBazaar also has an insurance brokerage license from IRDAI. With this license, it can create a physical presence that could include a wider product range, claim assistance and point-of-sale network.
PaisaBazaar is also an online marketplace but for lending products. Details about financial products like personal loans, business loans, education loans, credit cards, mutual funds, etc., can be studied on PaisaBazaar.

How does the firm plan to use the raised capital?

Out of the IPO proceeds, around Rs 1500 crore is earmarked to increase the two flagship marketplaces’ brand visibility and awareness. Rs 375 crore will be used to increase the customer base through various growth initiatives, including building a physical presence. PB Fintech also has an overseas presence, and it plans to use another Rs 375 crores to increase its international footprint. Strategic fundings and acquisitions will be financed with Rs 600 crores, derived from the IPO proceeds.

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How are the financial performances of PB Fintech? 

Although PB Fintech has reported losses in the last three years, there has been a marked improvement in the performance. From a reported loss of Rs 346 crores in FY 2019, the loss decreased to Rs 304 crores in FY 2020. Its losses in the previous financial year have come down to Rs 150 crores. During this time, its revenue has increased from Rs 529 crore in FY 2019 to Rs 856 crore in 2020 and Rs 957 crores in 2021. Its assets have increased more than three times in the last three years, from Rs 751 crores in 2019 to Rs 2331 crores in 2021.

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