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Updated on: Monday, November 01, 2021, 10:52 AM IST

Policybazaar IPO opens today: Should you subscribe? Brokerages weigh in

On Friday, PB Fintech said it has garnered a little over Rs 2,569 crore from anchor investors ahead of its IPO ./ Representative Image |

On Friday, PB Fintech said it has garnered a little over Rs 2,569 crore from anchor investors ahead of its IPO ./ Representative Image |

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PB Fintech, which operates online insurance platform Policybazaar and credit comparison portal Paisabazaar, will open for subscription today. The IPO will close for subscription on November 3.

The company has set a price band of Rs 940-980 per share. Of the entire issue, 75 per cent will be reserved for qualified institutional buyers, 15 per cent for non-institutional investors and the remaining 10 per cent for retail investors.

On Friday, PB Fintech said it has garnered a little over Rs 2,569 crore from anchor investors ahead of its IPO .

The company has decided to allocate 26,218,079 shares to 155 anchor investors at Rs 980 apiece, aggregating the transaction size to Rs 2,569.37 crore, according to a circular uploaded on BSE website.

Goldman Sachs, Nomura, BlackRock Global Funds, Morgan Stanley, Canada Pension Plan Investment Board, Fidelity, Abu Dhabhi Investment Authority, ICICI Prudential Mutual Fund (MF), SBI MF, Axis MF and UTI MF are among the anchor investors that have been allocated shares.

Fresh issue and OFS

The Rs 5,710-crore IPO comprises a fresh issue of Rs 3,750 crore worth of equity shares and an offer for sale of about Rs 1,960 crore by existing shareholders.

As part of the OFS, SVF Python II (Cayman) will sell shares worth Rs 1,875 crore, Yashish Dahiya will offload shares worth Rs 30 crore, Alok Bansal will divest shares worth Rs 12.75 crore, Shikha Dahiya will sell shares to the tune of Rs 12.25 crore and Rajendra Singh Kuhar will offload shares worth Rs 3.5 crore. In addition, Founder United Trust will sell around 2,67,500 shares and in upper band price it comes to around Rs 26.21 crore.

Proceeds of issue

Proceeds of the fresh issue will be used towards enhancing visibility and awareness of the company's brands, to look for new opportunities to expand growth initiatives to increase the consumer base including offline presence.

Also, the proceeds from the IPO will be used for funding strategic investments and acquisitions, expanding presence outside India and general corporate purpose.

PB Fintech is the online platform for insurance and lending products, leveraging the power of technology, data and innovation. It provide convenient access to insurance, credit and other financial products.

Kotak Mahindra Capital Company,Morgan Stanley India Company, Citigroup Global Markets India, ICICI Securities, HDFC Bank Ltd, IIFL Securities and Jefferies India are the book running lead managers to the issue.

PB Fintech recorded a consolidated loss of Rs 150.24 crore in fiscal 2020-21 (FY21), compared to a loss of Rs 304 crore in FY20 and loss of Rs 346.81 crore in FY19.

Should you subscribe?

Marwadi Shares and Finance Limited says, "Considering the TTM (June 2021) sales of Rs.9,493.72 million on the post-issue basis, the company is going to list at a market cap/sales of 46.40 with a market cap of Rs.4,40,510 mn. There are no listed companies in India whose business is comparable with that of the company’s business. We assign an “Avoid” rating to this IPO as valuations are demanding for a loss-making company. "

Choice Broking says, "Subscribe for Long Term” to PB Fintech Ltd."

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Published on: Monday, November 01, 2021, 10:52 AM IST
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