Last week, India’s largest online insurance aggregator Policybazaar’s parent firm PB Fintech filed its draft red herring prospectus(DRHP) for IPO proceedings to raise Rs 6017 crore(approximately $809 million).
Here are the key details you should know about Policybazaar and its initial public offering(IPO):
Policybazaar became the fifth Indian startup after Zomato, Mobikwik, Paytm, CarTrade to initiate IPO proceedings debut in the Indian stock market this year. Kotak Mahindra Capital Company and Morgan Stanley India Company are taking care of booking running lead and global coordination task of Policybazaar IPO issue. Citigroup Global Markets India, ICICI Securities, HDFC Bank, IIFL Securities, and Jefferies India are the book running lead managers to the offer.
As per Policybazaar’s DRHP filing, the fintech startup wants to start a public issue of Rs 6017 crore. It consists of Rs 3,750 crore fresh issue and Rs 2267.5 will be an offer for sale(OFS) by the existing investors or shareholders. SVF Python II, one of the major investors in Policybazaar, plans to sell its shares worth Rs 1,875 crore under OFS. The remaining Rs 392.5 crore’s OFS will be by other selling shareholders.
PB Fintech is also considering a pre-IPO private placement of shares up to Rs 750 crore in consultation with the merchant bankers. If the firm gets successful in it, the fresh issue size will be reduced by the amount raised from the pre-IPO placement.
With the help of fresh issue proceeds, the fintech startup aims to invest around Rs 1500 crore to achieve more visibility and awareness of its brands like Policybazaar and Paisabazaar in the Indian market.
PB Fintech is also looking to strengthen its offline operations in India by investing Rs 375 crore from the IPO proceeds. Strategic investments and acquisitions is another major area where the fintech firm plans to invest Rs 600 crore) from the fund raised by the fresh issue of its IPO. PB Fintech also has plans to expand its operations globally. To do so, it aims to invest Rs 375 crore, included general purpose expenditures.
About PB Fintech and Indian Digital Insurance Market
As per Frost and Sullivan’s report, PB Fintech is the largest online Indian insurance firm that has attractive and affordable insurance and lending products and services. The startup has reached the highest level in the Indian market due to the effective use of the power of technology, data, and innovation.
Policybazaar, the main platform of PB Fintech, was launched in 2008 to aware customers of different insurance products. The platform showed huge growth due to transparency, more choices, neutral offerings, and customized products in the insurance sector. A few days back, the fintech startup also announced that it has got IRDAI approval to operate as an insurance broker.
The fiscal year 2020 report revealed that Policybazaar had a 93.4 percent digital insurance market share based on several policies sold. Policybazaar, India’s largest digital insurance marketplace, also transacted 65.3 percent of all digital insurance sales in India.
At the end of FY21, Yashish Dahiya led Policybazaar recorded over 4.8 crore consumers’ registrations with 1.9 crore policies purchased. Over 12.65 crore users visited the online platform during FY2021.
As per the insurance industry report, the market for insurance products in India is estimated to be Rs 7.6 lakh crore ($102 billion) in total premium in FY20 across life and non-life insurance and is expected to grow to Rs 39 lakh crore ($520 billion) by FY30 at a CAGR of 17.8 percent.
The Indian insurance market is one of the least penetrated markets in terms of sum assured as a percentage of GDP of only 24.6 percent, compared to 265 percent in the USA and 95.4 percent in China in FY20.
During FY20, Indian online insurance channels sold 1.0 percent of the total premium, while the USA recorded 13.3 percent of insurance premium sales online. China sold 5.5 percent insurance premiums online during FY20.