PB Fintech’s Revenue Muddle Amid Healthcare Foray

What’s brewing at PB Fintech? That’s the question many are asking this past week after the release of a curious report by Mumbai-based Trudence Capital.But this does not track with what the company’s management has told investors and analysts in public disclosures, Trudence claims. So where exactly is the gap?Clearly, there was a broad jump in commissions, so why did PB Fintech claim that take rates did not have a material shift in early FY24?Further Trudence questions why, if at all, the revenue streams of Paisabazaar have crept into the insurance business of PB Fintech, despite Paisabazaar not being registered with the IRDAI. “But what management commentary is suggesting, it is likely that PolicyBazaar’s revenue was being recorded in Paisabazaar. Is this a normal business practice, or has PB circumvented the law in this manner?” Trudence asked.The company’s shares crashed by over 5% to hit an intraday low of INR 1,322 apiece on the BSE on Thursday, March 13, before finally finishing the week at INR 1,327.80. News around potential revenue red flags will not ease the pressure on the stock.Then in early March, the company’s CEO Yashish Dahiya settled a case with the Securities and Exchange Board of India for alleged failure to disclose unpublished price sensitive information about an overseas acquisition. Dahiya proposed to settle the proceedings against him without admission of guilt or denying the findings of the case,But the questions raised in the Trudence analysis are not likely to go away any time soon. In fact, we expect the Q4 results in April to address these concerns head-on, or at the very least, clarify any doubts pertaining to revenue recognition.“This transition means tighter governance, more regulatory compliance and a higher expectation for transparency. Fortunately, as a debt-listed entity, we have a solid foundation to cope with these changes. On a personal level, public listing means adopting a more structured leadership approach, balancing agility and stability while ensuring we continue to innovate.”Paisabazaar

The PB Fintech analysis by Trudence questioned past revenue recognition practices by the company, as well as the role of Paisabazaar, PB Fintech’s lending arm, and even allegations about misleading analysts and investors in post-earnings calls by PB Fintech.Fintech2014GurugramNaveen Kukreja