PB Fintech Limited IPO: Opens tomorrow; key details that investors must know before investing

PB Fintech Limited, the owner of the online insurance aggregator and fintech PolicyBazaar and PaisaBazaar, will launch its initial public offering (IPO) of the subscription tomorrow, i.e., November 31, 2021. The company has fixed the price band for the offer at Rs 940-980 per share as it seeks to raise around Rs 5,710 crore from the issue. The issue will close on Wednesday, November 3, 2021.

The issue comprises a fresh issue of equity forth Rs 3,750 crore and an offer for sale of Rs 1,960 crore by the existing promoter and shareholders of the company.

The retail investors can buy a minimum of one lot of 15 shares for an amount of Rs 14,700, at the upper price band, and a maximum of 13 lots (195 shares for Rs 1,91,100 crore). The tentative listing date for the IPO is November 15, 2021.

Of the total issue, 75 per cent will be reserved for Qualified Institutional Buyers (QIB), 15 per cent for non-institutional investors and the remaining 10 per cent for retail investors.

Issue Timeline

• Bidding period: November 1-3, 2021
• Allotment: November 10, 2021.
• Refund Initiation: November 11, 2021.
• Share Crediting: November 12, 2021.
• Listing: November 15, 2021.

Citigroup Global Markets India Private Limited, Kotak Mahindra Capital Company Limited, Morgan Stanley India Company Private Limited, ICICI Securities Limited, HDFC Bank Limited, IIFL Securities Limited and Jefferies India Private Limited are the book running lead managers of the issue. ICICI Bank Limited is the sponsor bank for the purpose while Link Intime India Private Limited is the registrar for it.

The company plans to utilise Rs 1,500 crore of the raised amount for enhancing visibility and awareness of company brands including Policybazaar and Paisabazaar. It plans to use Rs 375 crore towards new growth initiatives to increase customer base including offline presence.

Meanwhile, Rs 600 crore will be utilised for funding strategic investments and acquisitions. An additional Rs 375 crore will be dedicated to expanding its presence outside the country.

PB Fintech is India's leading online platform for insurance and lending products. The company provides convenient access to insurance, credit, and other financial products and aims to create awareness in India about the financial impact of death, disease, and damage.

Policybazaar has today built India's largest online platform for insurance and lending products leveraging the power of technology, data and innovation, according to Frost & Sullivan. The company provides convenient access to insurance, credit and other financial products and aims to create awareness amongst Indian households about the financial impact of death, disease and damage. Through their consumer-centric approach, they seek to enable online research-based purchases of insurance and lending products and increase transparency, which enables consumers to make informed choices.

Policybazaar and Paisabazaar platform offerings address the large and highly underpenetrated online insurance and lending markets. It has an asset-light capital strategy and does not underwrite any insurance or retain any credit risk on our books. Policybazaar is registered with and regulated by IRDAI as a direct (life and general) insurance broker.

Company Strengths

• PB Fintech is India's largest digital insurance marketplace with a 93.4 per cent market share based on the number of policies sold in FY20.
• Furthermore, in Fiscal 2020, Policybazaar constituted 65.3 per cent of all digital insurance sales in India by a number of policies sold (including online sales done directly by insurance companies and by 190 insurance distributors).
• The platforms have financial products offered by 51 Insurer Partners and 54 Lending Partners.

Potential Risks

• Part of a dynamic and competitive online fintech industry, making it difficult to predict future prospects.
• Inability to cater to evolving needs of consumers may lead to challenges in retaining or attracting customers. 

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