SUMMARY
Its IPO will open on November 1 and close on November 3 at a price band of INR 940-INR 980
There were concerns in the unlisted market that the shares were trading at a significant premium compared to the eventual price band
The fintech unicorn will raise INR 5,708.64 Cr to INR 5,951.56 Cr
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The share price of Policybazaar and Paisabazaar parent PB Fintech in the unlisted market has dropped by 36-39% to INR 1,100 – INR 1,400 (on Wednesday, 27th October). The drop came just a day after the company announced the price band for the initial public offering (IPO).
The shares were trading at INR 1,800 – INR 2,200 on Tuesday (26th October).
However, the price is still higher than the IPO price band of INR 940-980 a share. The fintech unicorn’s IPO will open on November 1 and close on November 3.
For the past few days, its unlisted share prices had been trading in this range, with bulk buyers pitching in at INR 1,800, while some retail buyers bought the shares at INR 2,200 apiece.
The price band has come in largely in line with what the market was anticipated. Traders were expecting the IPO price band to be around INR 1,000-1,100. There were also concerns that shares in the unlisted market were trading at a significant premium compared to the eventual price band.
Manan Doshi, Cofounder of Unlisted Arena said, “In recent scenario, with an increase in financial literacy and supportive laws for insurance, PB Fintech is likely to remain in focus. The competition in the fintech sector is quite high and further intensification cannot be ruled out but PB Fintech is well-placed in its business due to first-mover advantage.”
“The pricing of the IPO does look expensive, the company has narrowed its losses, and profitability may not be far unlike other cash-burning startups,” he added.
The fintech unicorn will raise INR 5,708.64 Cr to INR 5,951.56 Cr. The offer will include a fresh issue of up to INR 3,750 Cr.
Traders said that as per grey market estimates, the shares will list at a premium of INR 190-200 from the issue price.
In FY21, the company reported INR 957.4 Cr in total income, up by 12% over the previous fiscal.
Masayoshi Son-led SoftBank will offload part of its stake in the fintech unicorn through offer for sale (OFS). Through SVF Python II and SVF India Holdings (Cayman) Limited, SoftBank holds 15% stake in the company.
Its OFS would include shares worth up to INR 1,875 Cr from SVF Python II (Cayman) Limited, which holds 9.45% stake in the company.
Yashish Dahiya, the CEO and cofounder of Policybazaar, holds 4.27% stake and will offload stocks worth INR 30 Cr in the IPO. The cofounder and CFO of the company, Alok Bansal, will sell stocks worth up to INR 12.75 Cr, while Shikha Dahiya and Rajendra Singh Kuhar will offload stocks worth up to INR 12.25 Cr and INR 3.5 Cr respectively.
Founder United Trust will offload 267,500 shares in the OFS.
Founded by Yashish Dahiya, Alok Bansal, and Avaneesh Nirjar in 2008, PolicyBazaar aggregates insurance policies from a range of providers for use-cases, including life insurance, automobile insurance, health insurance and more. The Delhi NCR based startup had filed DRHP in August.
It has raised more than $766 Mn from 22 investors, including SoftBank, Temasek, Info Edge, etc.
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