PB Fintech Limited (policybazaar.com)

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. Company launched Policybazaar, in 2008 to create a consumer-pull based, provider-neutral model for insurance distribution. In Fiscal 2020, Policybazaar was India's largest digital insurance marketplace among all online insurance distributors with 93.4% market share based on number of policies sold.  Furthermore, in Fiscal 2020, Policybazaar constituted 65.3% of all digital insurance sales in India by number of policies sold (including online sales done directly by insurance companies and by insurance distributors).  In 2014, company launched Paisabazaar with the goal to transform how Indians access personal credit by accentuating ease, convenience and transparency in selecting a variety of personal loans and credit cards. Paisabazaar was India's largest digital consumer credit marketplace with a 53.7% market share, based on disbursals in Fiscal 2021. Paisabazaar is also widely used to access credit scores, with approximately 22.5 million Consumers cumulatively having accessed their credit score through the platform as of June 30, 2021. Company have an asset-light capital strategy and do not underwrite any insurance or retain any credit risk on the books. Policybazaar is registered with and regulated by IRDAI as a direct (life and general) insurance broker. Company primarily generate revenues from the following sources: (i) for the Policybazaar business, from insurance commission that they receive from the Insurer Partners, and additional services that they provide to Insurer Partners such as telemarketing and other services relating to sales and post-sales services, account management, premium collection and various other services, (ii) for the Paisabazaar business, from the commission that they receive from the Lending Partners, credit advisory and related services that they provide to the Consumers or Lending Partners, and marketing services that they provide to financial services partners and other third parties, and (iii) for the Company, from providing online marketing, consulting and technology services to Insurer and Lending Partners. As per financial performance, PB Fintech Limited has posted total income/net profits of Rs. 528.81 Cr / Rs. (348.08) Cr (FY19), Rs. 855.56 Cr / Rs. (303.14) Cr (FY20), Rs. 957.41 Cr / Rs. (348.08) Cr (FY21) and Rs. 258.17 Cr / Rs. (111.56) Cr. So company has posted growth in revenues in last couple of years, but also posted huge losses. They have posted an average EPS of Rs. (6.95) and average RoNW of (23.57)% for last three fiscals. Issue is priced at a P/BV of 19.14 as per NAV of 51.19 on 30.06.21. As company is making losses, so there is no measure to check, if its fairly priced or not. As per RHP, there are no listed peers in market. On BRLM's front, seven lead managers are associated with this IPO, and have handled around 89 IPO in last three fiscals. From last 10 IPOs, two is opened below issue price and remaining are opened above issue on the day of listing. As of now, 4 are trading below issue price and other are trading above issue price. ( As on 26.10.21) As per financials, PB Fintech Limited has shown sales growth, RoNW is (7.54)% and posting consistent losses. Company provides online platform for insurance and lending products and also market leader in this segment. This sector is expected to grow at good rate and being market leader will give advantage to this company. But when company will generate profits, is big question. So, we give NEUTRAL rating for this IPO and one may apply only for long term investment.

• 1 Sharad Virji Shah
• 2 Munjal Sharad Shah