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PB Fintech Ltd (PolicyBazaar) IPO

Current
Subscription Details
  • Open Date 31 Oct
  • Close Date 02 Nov
  • Lot Size 15 Equity Shares
  • IPO Size ₹ ₹ 5700 Cr
  • IPO Price Range ₹ 940 to 980
  • Min Investment ₹ 14,700
  • Listing Exchange NSE, BSE

PB Fintech Ltd (PolicyBazaar) IPO Timeline

Open Date
31 Oct
Close Date
02 Nov
Basis of Allotment
09 Nov
Refunds
10 Nov
Credit to Demat Account
11 Nov
Listing Date
14 Nov

IPO Synopsis

The total issue size of Policy Bazaar IPO is ~₹5,700 Crore, with the lot size of 15 equity shares at the IPO price range between ₹940-₹980. The IPO consists of a fresh issue of ₹3,750 Crore and offer for sale of ₹1,933.50 Crore by existing shareholders and promoters.

Policy Bazaar Founders including CEO Yashish Dahiya will together sell shares worth ₹392.50 Crore ($52 Million). SVF Python II (Cayman), which has 9.75% stake, will cash in shares worth around ₹1,875 Crore ($250 Million).

Policy Bazaar IPO proceeds from the fresh issue will be used to:

• Enhancing visibility and awareness of its brands, including but not limited to “Policybazaar” and “Paisabazaar”;

• New opportunities to expand its consumer base including its offline presence;

• Strategic investments and acquisitions;

• Expanding its presence outside India;

• General corporate purposes.

 

PB Fintech Limited (Policy Bazaar) Shareholding Pattern

 

% Shareholding

Pre- IPO(%)

Promoter & Promoter Group

94.52

Public

5.48

Source: Company RHP

PB Fintech Ltd (PolicyBazaar) IPO Subscription Status

PB Fintech Ltd (PolicyBazaar) IPO Subscription Status

Category Subscription Status
Qualified Institutional (QIB) 24.89 Times
Non-Institutional (NII) 7.82 Times
Retail Individual 3.31 Times
Total 16.59 Times

 

PB Fintech Ltd (PolicyBazaar) IPO Subscription Details (Day by Day)

 
Date QIB NII Retail Total
November 01, 2021 17:00 0.56x 0.06x 1.18x 0.54x
November 02, 2021 17:00 2.08x  0.23x  2.04x  1.59x 
November 03, 2021 17:00 24.89x 7.82x 3.31x 16.59x

About PB Fintech Ltd (PolicyBazaar)

PB Fintech has built India's largest online platform for insurance and lending products leveraging the power of technology, data and innovation, according to Frost & Sullivan. It provides convenient access to insurance, credit and other financial products and aims to create awareness amongst Indian households about the financial impact of death, disease and damage.

It launched Policybazaar, its flagship platform, in 2008 to respond to consumers’ need for more awareness, choice and transparency and create a consumer-pull based, provider-neutral model for insurance distribution. According to Frost & Sullivan, in FY20, Policybazaar was India’s largest digital insurance marketplace with a 93.4% market share based on the number of policies sold. In FY20, 65.3% of all digital insurance sales in India by volume was transacted through Policybazaar.

In 2014, it launched Paisabazaar with the goal to transform how Indians access personal credit by accentuating ease, convenience and transparency in selecting a variety of personal loans and credit cards. According to Frost & Sullivan, Paisabazaar was India’s largest digital consumer credit marketplace with a 51.4% market share, based on disbursals in FY20. Paisabazaar is also widely used to access credit scores, with approximately 21.5 million consumers cumulatively having accessed their credit score through this platform as of March 31, 2021.

Both Policybazaar and Paisabazaar platforms address the large and highly underpenetrated online insurance and lending markets. Company has an asset-light capital strategy and does not underwrite any insurance or retain any credit risk on its books.

PB Fintech Ltd (PolicyBazaar) Promoter Holding

No data Available

41343

PB Fintech Ltd (PolicyBazaar) IPO Financial Status

PB Fintech Ltd (Policy Bazaar) - Financial

 

Particulars (₹ in million)

FY19

FY20

FY21

Total Premium

23,154

37,586

47,013

New Business Premium

17,187

26,404

27,429

Total Operating Income

4,922.45

7,712.97

8,866.62

Restated Loss for the Year

(3,468.11)

(3,040.29)

(1,502.42)

Source: Company RHP


Key Points

Strengths

• Strong, consumer-friendly brands offering wide choice, transparency and convenience Company offers wide choice, transparency and the ability for consumers to research and access insurance and personal credit products offered by its insurer and lending partners. Both brands of Policybazaar and Paisabazaar enjoy strong recall owing to their customer-centric approach. In FY21, 83.0% of the policies sold on Policybazaar and 66.0% of loans originated on Paisabazaar were to consumers who came to these platforms directly or through direct online brand searches. Company’s marketing campaigns are focused on themes including “comparing products and features”, “not getting fooled” and “making the right buying decision”, reinforcing the purpose of Policybazaar and Paisabazaar to enable consumers make informed purchasing decisions, by comparing options and features across products, insurers and lending partners.

• Proprietary technology, data and intelligence stack Company’s proprietary technology stack helps it design user-friendly consumer journeys across its processes by automating various aspects across the product value chain. Using its technology, the company engages with consumers through easy-to-navigate mobile apps and websites which automate and digitize the consumer journey of purchasing insurance and personal credit products. It leverages technology to provide high quality consumer service, besides applying voice analytics and behavioral insights of consumers.

• Collaborative partner for insurer and lending partners As per Frost & Sullivan, Policybazaar was India’s largest digital insurance marketplace with a 93.4% market share based on the number of policies sold in FY20. In the same year, 65.3% of all digital insurance sales in India by volume was transacted through Policybazaar. 51 Insurer Partners sell their products on Policybazaar, which represents 87.9% of all licensed insurers in India. Paisabazaar was India's largest consumer credit marketplace with a 51.4% market share based on disbursals in FY20, as per Frost & Sullivan. Paisabazaar has 54 partnerships with large banks, large NBFCs and fintech lenders. PB Fintech provides its partners access to the large consumer base of both Policybazaar and Paisabazaar to enhance their sales. Using its data insights, the company’s partners are able to target the right consumers for their products, at lower costs. It works with its partners to improve their risk assessment models, fraud detection and underwriting capabilities. Company also helps them create customized products to address the needs of consumers and identify market gaps and better serve their consumers.

• Scale provides unique self-reinforcing flywheels and strong network effects Both Policybazaar and Paisabazaar platforms have large, efficient and intelligent networks, providing consumers with the ability to browse financial services products offered by 51 insurers and 54 lenders. PB Fintech benefits from powerful network effects at scale as a result of its strong positioning. The large and growing number of visitors to its Policybazaar and Paisabazaar platforms attract more insurer and lending partners who offer more products, which in turn further attracts more consumers, creating a virtuous cycle.

• High renewal rates provide clear visibility into future business and delivering superior economics Given the strong value proposition it offers to its consumers, and the nature of many insurance products, such as health and motor insurance where renewals are common, company is able to benefit from long term retention and visibility of business from existing consumers. This provides clear visibility into its future business outlook as it is able to generate revenue from a consumer over a long time period with negligible additional spend towards consumer acquisition leading to superior unit economics.

• Benefits from economies of segmentation Policybazaar and Paisabazaar platforms serve consumers with varied needs, credit profiles, demographics, employment types and income levels. PB Fintech systematically segments consumers into different cohorts based on their needs and disclosures to ensure higher accuracy of product offers. For Paisabazaar, it aims to build customized lending solutions for different consumer segments. PB Fintech’s micro-segmentation has helped grow the product offerings on its platforms, streamline transaction processes, deepen partnerships with partners, and offer tailor-made financial solutions.

• Capital efficient model with low operating costs The company aggregates and distributes insurance and personal credit products offered by its partners and does not create its own products and hence does not carry any corresponding underwriting or credit risks. Further, as its brand continues to grow stronger, a larger percentage of users will use its platform directly or without marketing costs. As these platforms and consumer cohorts continue to develop, company expects a larger proportion of consumers to buy either unassisted or with reduced levels of assistance, which should increase its capital and operational efficiency.

• Founders with clarity of purpose backed by experienced management PB Fintech’s founders have a deep understanding of its consumers’ pain points and the structural problems in the insurance and financial services industry. They each have almost two decades of experience and commitment to solve those problems, along with a deep understanding of consumer insights and technology. Likewise, its management team has rich domain expertise. Policybazaar and Paisabazaar are run by independent management teams under the leadership of PB Fintech’s founders. Its entrepreneurial culture and relentless focus on execution has helped it attract and retain talent to further help grow its business and execute its plans.

 

Growth strategy

• Broaden and deepen consumer reach in India PB Fintech aims to attract new consumers while deepening its relationship with existing ones for both Policybazaar and Paisabazaar platforms. Policybazaar strives to deepen engagement with consumers to meet all their insurance requirements (including protection against death, disease and damage) through cross-sell and up-sell, improving consumer retention and reducing consumer acquisition costs. To supplement Policybazaar’s digital presence, PB Fintech plans to expand its presence through offline channels by leveraging its recently approved direct (life and general) insurance broker license. It aims to provide in-person consumer engagement and services in local languages through its offline retail offices across India. As of July 15, 2021, company had set up 15 physical offices and it intends to develop up to 200 physical retail outlets across all city tiers in India by the end of FY24. Company will now also be able to provide its consumers on-ground claims support. Company will follow a hub and spoke structure, wherein it will hire one regional manager for every five designated regions. It will also develop a network of point-of-sale-persons across strategic locations in India. Paisabazaar strives to deepen consumer engagement and boost loyalty to become the destination of choice for consumers for their credit solutions.

• Replicate its platform for SME and corporate clients PB Fintech has built a proven, scaled and capital efficient business model targeting retail consumers across insurance and credit. It will leverage its execution capabilities, expertise in the Indian financial services sector and relationships with its partners to continue designing and offering products for SME and corporate clients. It facilitates digital quotations to corporate consumers for their employees’ insurance requirements, which would otherwise be a lengthy process, and allow for digital purchasing and servicing. Its goal is to develop high quality servicing for corporate employees with a high degree of platform-based flexibility to manage their policies, along with integrated wellness and OPD offerings.

• Continue to invest in its brands Both Policybazaar and Paisabazaar brands have gained significant trust and recall among consumers. PB Fintech will continue to invest in its brand building activities to educate consumers about insurance and personal credit needs. It will invest in historically successful mediums such as television, while also leveraging the power of social media, digital media and embedded advertisements.

• Neo-lending strategy to cover innovation and segment gaps PB Fintech aims to co-create and design innovative products to address evolving consumer needs, enable underserved segments to access credit, build lifetime engagement with consumers and create annuity revenue streams. Through control on design of the products and processes, the company’s endeavor would be to provide an unmatched consumer experience. This will also enable collection of large quantities of data related to usage and behavior, which will provide key insights and intelligence.

• Continue to invest in its digital and technology infrastructure PB Fintech will continue to invest in its platforms to ensure a seamless experience packed with convenience, speed and choices for its consumers, while providing finer data insights to its partners to further improve their service delivery. It will use data analytics extensively to help consumers with more personalized recommendations and an intuitive and effective experience. Identifying consumer needs accurately, factoring in their life-stage along with new-age features like image recognition, voice analytics and language processing would help the company manage its back-end operations efficiently, providing robust systems.

• Pursue strategic investments and acquisitions to enhance product and service capabilities PB Fintech intends to pursue strategic investments and acquisitions which are complementary to its business to enhance product and service capabilities, which will help it scale faster. It will enhance its service capabilities both internally and externally through investments in the health and wellness segments that can offer better consumer claims and purchase experiences.

• Pursue international expansions PB Fintech has begun expanding in the Middle East with operations in Dubai, and it will scale up its operations and brand presence in the broader Gulf Cooperation Council (“GCC”) region. It may pursue similar opportunities in select Southeast Asian countries by replicating its proven business model in India along with exploring inorganic growth opportunities. It will build a team of experienced engineers and support staff in these regions who would work on building and maintaining its technology infrastructure. Further, it will invest in physical infrastructure, communication infrastructure, employee cost and support cost incurred on facilities used by employees and consumer service.

 

Risk factors

• Company operates in dynamic and competitive online fintech industries, making it difficult to predict its future prospects

• Failure to maintain and enhance its brand reputation could adversely impact business

• Company has a history of losses and it anticipates increased expenses in the future

• High competitive intensity

• Any disruption to its IT systems and infrastructure could materially affect its ability to maintain the performance of its platforms and deliver consistent services to users

• Failure to protect confidential information, prevent cybersecurity and data breaches or improper use or disclosure of data will materially and adversely affect its business and reputation

• Seasonal fluctuations on the Policybazaar platform

• Inability to retain existing insurers and lending partners and attract new ones could impact company’s business significantly

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Contact Details of PB Fintech Ltd (PolicyBazaar) IPO

Contact Information

Address

PB Fintech Limited

Plot No. 119,
Sector 44 Gurgaon,
Haryana 122 001, India
Phone: +91 124 456 2907
Email: investor.relations@pbfintech.com
Website: https://www.pbfintech.in/

PB Fintech Ltd (PolicyBazaar) IPO Register

Address

Link Intime India Private Ltd

Phone: +91-22-4918 6270
Email: policybazaar.ipo@linkintime.co.in
Website: http://www.linkintime.co.in

PB Fintech Ltd (PolicyBazaar) IPO Lead Manager

  • Citigroup Global Markets India Private Limited
  • HDFC Bank Limited
  • ICICI Securities Limited
  • IIFL Securities Ltd
  • Jefferies India Private Limited
  • Kotak Mahindra Capital Company Limited
  • Morgan Stanley India Company Pvt Ltd

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