Paisabazaar Under Income Tax Dept’s Scanner Over ‘Certain Vendors’

Listed startup PB Fintech informed the bourses that Income Tax (IT) sleuths ‘visited’ the offices of its subsidiary Paisabazaar earlier this week.

In a filing with the BSE, the fintech major said that the visits were conducted on December 13 and 14 and pertained to certain vendors of Paisabazaar.

“We hereby inform you that the Income Tax officials visited Paisabazaar, a wholly owned subsidiary and PB Fintech Limited on 13th & 14th December, 2023 and enquired about certain vendors of Paisabazaar,” said the company. 

The company said that it has furnished information sought by the officials and will continue to provide further details that might be required by the Department in future. Assuaging the investors, PB Fintech added that the business operations of Paisabazaar continue as usual and were not impacted on account of the visits. 

This comes nearly two months after the Securities and Exchange Board of India (SEBI) imposed a fine of INR 1 Lakh on Paisabazaar for employing a principal officer without requisite qualification. The markets regulator then said that Paisabazaar cofounder and chief executive officer (CEO) Naveen Kukreja, who was also the company’s principal officer, did not possess the National Institute of Securities Markets (NISM) certification.

The visits come when Paisabazaar has been clocking hefty revenue growth while scaling up operations. Paisabazaar closed the second quarter (Q2) of the financial year 2023-24 (FY24) with a revenue of INR 154 Cr, contributing little more than 25% to the parent PB Fintech’s core quarterly revenues.

At the end of the September quarter, the credit marketplace vertical clocked an annual loan disbursal rate of INR 16,600 Cr, having disbursed loans worth INR 4,129 Cr on the platform during the three-month period.

Meanwhile, PB Fintech reported a loss of INR 21 Cr in the second quarter (Q2) of the financial year 2023-24 (FY24), down more than 89% year-on-year (YoY). Meanwhile, revenues soared 42% YoY to INR 812 Cr during the same period. 

The quarter ended September 2023 was the third consecutive adjusted EBITDA-positive quarter for PB Fintech. The company’s consolidated EBITDA, excluding ESOP costs, hovered around the INR 13 Cr mark in Q2 FY24 against an adjusted EBITDA loss of INR 53 Cr during the same period last year. 

Last month, PB Fintech chairman and CEO Yashish Dahiya affirmed that the company would begin clocking profits from Q3 onwards.

Meanwhile, PB Fintech closed the day 2.31% lower at INR 789.45 on the BSE on Friday (December 16).