PB Fintech Ltd, which runs the online insurance platform PolicyBazaar and the credit comparison website PaisaBazaar, has obtained approval from the capital markets regulator Securities and Exchange Board of India (SEBI) to raise Rs 6,017.50 crore through its initial public offering (IPO).
The fintech startup is seeking a valuation between $6 billion to $7 billion, up from an expected valuation of $5.5 billion to $6 billion. The company is expected to go public before Diwali. According to the draft red herring prospectus (DRHP), the initial public offering (IPO) will include a primary issue of Rs 3,750 crore in equity shares and an offer for sale of Rs 2,267.50 crore by existing shareholders.
SVF Python II (Cayman) would offload shares worth Rs 1,875 crore, Yashish Dahiya will liquidate shares worth Rs 250 crore, and some other selling shareholders will also offer shares as part of the OFS. The IPO-bound company may consider raising around Rs 750 crore through the private placement of equity shares.
The proceeds from the new issue will be allocated to strengthen the company’s brand recognition and awareness, as well as to explore new opportunities to accelerate growth initiatives and expand the consumer base, especially in the offline markets. Moreover, the funds from the IPO will be leveraged to fund strategic investments and acquisitions, increase the company’s footprint outside of India, and for general corporate purposes.
PB Fintech has appointed Citigroup Global Markets India, HDFC Bank Ltd, ICICI Securities, Kotak Mahindra Capital Company, Morgan Stanley India Company, IIFL Securities, and Jefferies India as book-running lead managers for the issue.
PolicyBazaar, founded by Yashish Dahiya, Avaneesh Nirjar, and Alok Bansal in 2008, claims to be India’s largest online marketplace for insurance and lending services, harnessing the power of technology, data, as well as innovation. The fintech startup seeks to raise awareness among Indian households regarding the financial implications of death, disease, and damage by providing easy access to insurance, credit, and other financial services.
The company stated that it plans to launch up to 200 physical retail stores and estimates investing up to Rs 150 crore to grow its offline presence by the end of FY24. PolicyBazaar has secured around $766 million in funding from 22 investors, which include SoftBank, Info Edge, Temasek, among many others.
India’s insurance market is estimated at Rs 7.6 trillion in terms of overall premium in FY20. According to the company’s DRHP, this market is predicted to flourish at a 17.8 percent CAGR to surpass Rs 39 trillion (~$520 billion) by FY30, with life, health, and other general insurance emerging at 18.8 percent, 15.3 percent, and 13.5 percent CAGRs, respectively.