Policybazaar gets SEBI Approval for its Rs.6,017 Crore IPO
SEBI has given its approval for the Rs.6,017 crore IPO of PB Fintech. Incidentally, like in most cases, this is another case of the digital brand being better known than the promoting company. PB Fintech is the company that owns and operates some of the marquee digital brands like Policybazaar and Paisabazaar. The IPO is expected around the last week of October with Post Diwali listing.
PB Fintech is targeting valuation of around $7 billion for the entire property. In rupee terms, that would translate into a starting IPO market cap of around Rs.53,000 crore. Policybazaar is a digital platform that allows uses to select the insurance policy that is best suited to them based on a variety of parameters that customers can specify.
Policybazaar not only offers a digital platform to research and compare insurance policies from different originators, but it also enables transaction fulfilment through the portal itself. Paisabazaar, another property of PB Fintech, is into arranging of loans from leading financiers for customers based on a digital evaluation of credit needs and credit scores.
The Rs.6,017 crore IPO will comprise of a fresh issue of Rs.3,750 crore and an offer for sale of Rs.2,267 crore. Out of the total OFS size of Rs.2,267 crore, nearly Rs.1,875 crore worth of shares will be offered by early investor, Softbank Vision Fund Python. Tencent of China owns 9% in Policybazaar but will not be participating in the OFS. The founders of Policybazaar will also be looking to monetize part of their holdings via OFS.
Check - Policybazaar file for IPO
The digital business is an upfront spend-heavy business and requires a lot of investment in customer development, branding etc. Policybazaar will use a large part of the fresh issue proceeds towards enhancing the visibility and awareness of the brands as well as for customer acquisition. The company will also explore organic and inorganic expansion.
Among the major early investors in Policybazaar, Softbank of Japan owns around 15.76%, Tencent of China holds 9% and Claymore Investments owns 6.26%. Interestingly, Info Edge, owns a 14.56% stake in Policybazaar. It may be recollected that Info Edge was also the largest investor in Zomato although it had only sold a small part of its holdings in the OFS.
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