PB Fintech, which operates online insurance platform Policybazaar and credit comparison portal Paisabazaar, initial public offering (IPO) will open for subscription today. The three-day share sale's fixed a price band of ₹940-980 and the issue will conclude on November 3. The company on Friday said it garnered a little over ₹2,569 crore from anchor investors ahead of its IPO.
Policybazaar IPO was subscribed 54% on the first day of subscription on Monday. The portion for Qualified Institutional Buyers (QIBs) received 56 per cent subscription, while that for non institutional investors 6 per cent and Retail Individual Investors (RIIs) 1.18 times.
The ₹5,710-crore IPO comprises a fresh issue of ₹3,750 crore worth of equity shares and an offer for sale of about ₹1,960 crore by existing shareholders. PB Fintech is the leading online platform for insurance and lending products, offering access to insurance, credit and other financial products.
As per market observers, Policybazaar shares were available at a premium (GMP) of 150 in the grey market. The company is planning to list on leading stock exchanges NSE and BSE on 15 November.
“Macros of the insurance sector are positive and so are the fundamentals of PBFL. The company with its dominant position in the digital insurance and credit market, is expected to benefit from the abundant business opportunities in both the markets. At higher price band of Rs. 980, PBFL is demanding an EV/TTM Sales multiple of 40.5x, which seems to be very stretched. Considering the above observations we assign “Subscribe for Long Term" rating for the issue," said Choice Broking.
Proceeds of the fresh issue will be used towards enhancing visibility and awareness of the company's brands, to look for new opportunities to expand growth initiatives to increase the consumer base including offline presence.
"Policybazaar has so far able to attract new customers through unique 1.26 million visits during FY21 on its platform and maintained the leadership in digital marketplace. However, any public health threat like COVID-19 pandemic, could adversely affect the business, financial condition, and results of operations. If we consider the overall business model of Policybazaar and its valuations over the past years then a NEUTRAL rating on this issue would be most suitable," said Ravi Singh, Head of Research & Vice President, ShareIndia
Goldman Sachs, Nomura, BlackRock Global Funds, Morgan Stanley, Canada Pension Plan Investment Board, Fidelity, Abu Dhabhi Investment Authority, ICICI Prudential Mutual Fund (MF), SBI MF, Axis MF and UTI MF are among the anchor investors that have been allocated shares.
