PolicyBazaar Likely To Go For India Listing; Will File Draft Prospectus By Next Month

Online insurance unicorn PolicyBazaar could file its draft prospectus for an initial public offering in India by as early as next month according to reports. The company is seeking to raise about $500 Mn from its IPO. 

According to this new report by Bloomberg, the SoftBank backed startup is seeking a listing before the end of this year, said the people, asking not to be identified as the information is private, said the report. As reported earlier, an offering, which could value PolicyBazaar at more than $3.5 Bn, would involve new stocks and secondary shares from existing shareholders, the quoted people said.

In February this year, it was reported that PolicyBazaar was finalising bankers for its over $540 Mn IPO to be listed in India. PolicyBazaar’s parent company PB Fintech (formerly Etechaces Marketing and Consulting Pvt. Ltd) was said to have invited proposals from at least eight investment banks for the proposed IPO. The company is expected to dilute up to a 15% stake in the public offering. 

Last month, the insurance aggregator reportedly executed a secondary sale of shares worth about $45 Mn, with existing investors such as private equity firm True North and some individual investors selling their stake in the company. The secondary sale of shares valued the company at $2.4 Bn. 

Founded in 2008 by IIT Delhi and IIM Ahmedabad alumni Yashish Dahiya, Alok Bansal and Avaneesh Nirjar, PolicyBazaar is an online platform allowing users to purchase insurance policies, ranging from life insurance to car insurance and even two-wheeler insurance. The startup does this as it features products from all major insurance companies in India, to help its users decide the policy which suits them the best.

In November last year, it was reported that PolicyBazaar could raise around $50 Mn-$100 Mn from Alpha Wave Incubation (AWI), an early-stage fund anchored by Abu Dhabi’s state entity ADQ and managed by Falcon Edge Capital, a New York-based venture capital and hedge fund. According to latest updates on Crunchbase, to date, the company has raised $766.6 Mn in 13 funding rounds from 22 investors. Its most recent funding round was in March 2021, when it raised a $75 Mn private equity round led by Falcon Edge Capital. 

IPOs Galore In The Indian Startup Ecosystem

The positive reception of Indian startup IPOs last month has only improved sentiments across the ecosystem. In March, the Nazara Technologies IPO, in National Stock Exchange (NSE) ,got off to a flying start with public issue being oversubscribed by 175 times, while the EaseMyTrip (also NSE) issue was oversubscribed by over 160 times. 

PolicyBazaar plans to list in India, but Dahiya has previously said that he is open to a dual listing if the rules change. Several Indian tech startups such as Zomato, InMobi, Flipkart, Droom, Grofers and Delhivery, are planning to go for an initial public offering (IPO) this year. While some of them are considering a dual listing in India and the US, some are solely considering an overseas listing. Many startups have incorporated in the US and Singapore, where public listing rules and other considerations are friendlier. In fact, foodtech unicorn Zomato is reportedly planning to file a draft prospectus for its initial public offering (IPO) by April, with a fundraising target of $650 Mn. 

The government is also looking at options to ease overseas listing requirements of companies. In 2020, the Securities and Exchange Board of India (SEBI), in a consultation paper, had proposed nine changes to its Innovators Growth Platform (IGP) framework.The regulator had recommended reducing the hold period before listing from two years to one year. A holding period is the amount of time the investment is held by an investor or the period between the purchase and sale of a security. SEBI believes that a holding period of one year would lure investors who are looking for an early listing of the startup at the time of investing.