PB Fintech Shares Jump About 15% In Two Days

SUMMARY

PB Fintech shares have surged about 15% in two days, ending Friday’s session at INR 460.20

IRDAI’s move in issuing the new draft norm to remove caps on the payment of commission to insurance agents and intermediaries could be playing a major role in driving the rally

PB Fintech’s shares rallied significantly while a majority of its tech stock peers are under extreme pressure in the stock market

Shares of PB Fintech, which runs insurtech startup PolicyBazaar and lending platform Paisabazaar, continued their winning streak for the second straight session. The shares jumped as much as 8% to INR 466.95 during Friday’s (November 25) intraday trading on the BSE.

On Thursday, PB Fintech’s shares rose 7.8% to 432.20 after WF Asian Smaller Companies Fund bought a 1.5% stake in the startup worth INR 271 Cr in two separate bulk deals.

PB Fintech shares have surged about 15% in two days, ending Friday’s session at INR 460.20, up 6.5% from Thursday’s close.

Some analysts are of the opinion that IRDAI’s move in issuing the new draft norm to remove caps on the payment of commission to insurance agents and intermediaries could be playing a major role in driving the rally.

Post the implementation of the IRDAI guidelines, more clarity is expected on the commissions received by Policybazaar from its insurance partners. “This will provide more insights into its business and increase the Street’s conviction on the business model,” said brokerage Kotak Institutional Securities in a research note earlier this week.

It is pertinent to note that PB Fintech’s shares rallied significantly while a majority of its tech stock peers are under extreme pressure in the stock market. In fact, PB Fintech and Fino Payments Bank are the only two new-age tech stocks that are performing well despite their recent lock-in expiry and unlike their peers—Nykaa, Paytm, and Delhivery.

While PB Fintech faced a slight blip earlier this month following its Q2 FY23 results, the impending lock-in expiry for its pre-IPO inventors, and then a few stake sales, the startup managed to regain its momentum. Tiger Global first divested a 3.57% stake in PB Fintech, selling 1.6 Cr shares. Within days, the global VC firm dumped another 2.98% stake in the startup.

Brokerage JM Financial had noted in a recent research note that most PB Fintech’s per-IPO investors generated liquidity from their investments via OFS and secondary sales prior to the IPO, and it was less likely to face too adverse an impact from lock-in expiry.

PB Fintech also reported an 8.6% decline in its consolidated net loss to INR 186.5 Cr in Q2 FY23 helped by strong growth in its lending business.