The Securities and Exchange Board of India (Sebi) has approved the initial public offering (IPO) plans of PB Fintech, the parent company of online marketplaces Policybazaar and Paisabazaar, three people with direct knowledge of the development said. “It is looking at a valuation of around $6-7 billion for the listing,” said one of the sources. Another source said PB Fintech could look to list around Diwali. The company declined to comment as it hasn’t heard from Sebi.
The company had filed its draft red herring prospectus (DRHP) with Sebi on August 2, seeking to raise Rs 6,017 crore ($809 million) through an IPO. In its prospectus, the Gurgaon-based company said it would raise Rs 3,750 crore ($504 million) by issuing fresh shares and the remaining Rs 2,267 crore ($305 million) through an offer for sale (OFS), in which existing investors can sell their stakes on the exchanges.
SoftBank Vision Fund Python, which has a 9.75% stake in the firm, is expected to cash in shares worth around Rs 1,875 crore ($250 million) through the OFS, ET had reported.
Policybazaar’s founders — including chief executive Yashish Dahiya — are expected to sell shares worth a combined Rs 392.50 crore ($52 million). China’s Tencent, which owns more than 9% of PB Fintech, has not been listed as an investor seeking to dilute its stake during the OFS. Dahiya, along with Alok Bansal and Avaneesh Nirjar, founded Policybazaar in June 2008.
PB Fintech has been listed as an entity that is “foreign-owned and controlled.” To ease the compliance process, it is looking to list as a professionally managed company that does not have an identifiable promoter. Dahiya has been listed as chairman and executive director. He currently has a 4.27% stake in the company.
According to its draft filing, the company plans to use the IPO proceeds to enhance the visibility and awareness of its brands and expand its user base. Policybazaar and its affiliates will also look at making strategic investments and acquisitions to expand their presence outside India, it said.
Kotak Mahindra Capital, Morgan Stanley, Citigroup Global Markets India, ICICI Securities, HDFC Bank Ltd, IIFL Securities and Jefferies India are the book running lead managers to the issue.
In addition to Japan’s SoftBank, which owns about 15.76% in the fintech company through two separate funds, key investors include Info Edge, with about 14.56%, Claymore Investment, which owns 6.26%, investment firm Tiger Global, Falcon Edge and Alpha Wave.
In April, PolicyBazaar had raised $75 million in a round led by US-based Falcon Edge Capital to expand its services in the UAE and West Asia. It became a unicorn after SoftBank led an investment of more than $200 million in it in 2018.
As of March, Policybazaar had 4.8 crore registered users who had bought more than 1.9 crore policies from its insurer partners. It claims to have a 93% share of India’s online insurance aggregator market, saying it accounts for more than 65% of insurance policies sold online.
