Policy Bazaar IPO: All you need to know!

Policy Bazaar IPO: All you need to know!

Last updated: 29 Oct, 2021 | 11:23 am

Policy Bazaar IPO is subscribed 0.54 times as on Nov 1, 2021

PB Fintech IPO opens for subscription on 1st November. The company is looking to raise up to Rs 5,700 crore through the public issue. Here are the details:

About the IPO

PB Fintech IPO Date: 1 November - 3 November 2021

PB Fintech IPO Price band: Rs 940 - Rs 980

Issue Size: Rs 5,625 crore (consists of a fresh issue of Rs 3,750 crore and an offer for sale (OFS) component of Rs 1,875 crore)

Reservation: QIB 75%, Retail - 10%, NII 15%

Minimum investment: Rs 14700

Bid lot: 15 shares, and in multiples of 15 shares

Objectives of the issue

The company will use the net proceed from IPO for the below purposes - 

  • To enhance the awareness and visibility of its brands including but not limited to Paisabazaar and Policybazaar - Rs 1500 crore.
  • Look for new opportunities and expand company consumer base and even offline presence - Rs 375 crore.
  • To fund strategic investments and acquisitions - Rs 600 crore.
  • International expansion - Rs 375 crore.
  • General corporate purpose.

PB Fintech’s Business Verticals and Business Model

PB Fintech is India's leading online platform for lending and insurance products. The company launched Policybazaar and Paisabazaar in 2008 and 2014, respectively.

Peer Comparison

Policybazaar is India's largest digital insurance market with a market share of 93.4% based on the number of policies sold (FY20). Similarly, Paisabazaar was India's largest digital consumer credit marketplace with a 51.4% market share based on disbursals (FY20).

There are no listed companies in India that engage in a business similar to PB Fintech. However, there are many unlisted peers. Below is the comparison with the same.


  • PB Fintech is a loss-making company that has not reported any profit in the last three financial years.
  • PB Fintech reported total income of Rs 528.8 crore, Rs 855.6 crore, and Rs 957.4 crore in FY19, FY20, and FY21. In terms of revenue, the company has grown at a CAGR of 34.57%, which is an excellent growth number.
  • The loss has reduced from Rs 346.8 crore in FY19 to Rs 150.2 crore in FY21. One of the reasons for losses is that the company spends heavily on advertising. It spent around Rs 368 crore in advertising in FY21.
  • Return on Net Worth (RoNW) has increased from (70.74)% in FY19 to (7.54) in FY21.
  • Insurance web aggregator services form 68.5% of total revenues. Overall, commission income (both Policybazaar and Paisabazaar) constitutes ~36% of total revenues, while fees from outsourcing/consulting form 52%.
  • In FY21, it generated a premium of Rs 2742.9 crore for Insurer Partners from new insurance policies and a total premium of Rs 4701.3 crore including renewals, representing 41.7% of the original premium.


Customer-friendly platform - Both its platform offers consumers the ability to research and compare a wide range of insurance and loan products. Once the details of the products are shared, the company provides them with a number of options related to costs and features.

Company driven by technology, data, and intelligence - The company engages with consumers through easy-to-navigate mobile apps and websites which automate and digitize the consumer journey of purchasing insurance and personal credit products. 

Collaborative partner for Insurer and Lending Partners - They provide its Insurer and Lending Partners with access to the large consumer databases of both Policybazaar and Paisabazaar to enhance their sales. Using their data insights, Insurer and Lending Partners are able to target the right Consumers for their products. 

High renewal rates - The company offers a strong value proposition to its consumers, and with renewal products, they benefit from long-term retention and visibility of business from existing consumers. This provides clear visibility into future business outlook to generate revenue over a long time with negligible additional spend towards consumer acquisition leading to superior unit economics. 

Growth Potential

Broaden and deepen reach in India - The company aims to attract new consumers while deepening its relationship with current consumers on both platforms. For Policybazaar, it plans to expand its presence through offline channels by leveraging its recently approved direct (life and general) insurance broker license. Paisabazaar strives to deepen consumer engagement and boost loyalty to become the destination of choice for consumers for their credit solutions.

Target SME and Corporate clients - PB Fintech aims to leverage its execution capability and expertise to continue to design and offer products for SME and corporate clients. They plan to develop high-quality servicing for corporate employees with a high degree of platform-based flexibility to manage their policies.

Strategic investments and acquisitions - It aims to enhance its service capabilities both internally and externally through investments in the health and wellness segments that can offer better Consumer claims and purchase experiences.

International expansion - The company has already begun its expansion plan and started operations in the Middle East. It plans to scale up operations and brand presence in Dubai and the broader Gulf Cooperation Council (“GCC”) region. It plans to invest in creating a strong brand, building a robust team to cater to prospective consumers.


Difficult to predict future prospects - The company operates in dynamic and competitive online fintech industries. Both the online credit industry and the insurance and service industry are relatively new. The risks and challenges they may encounter in this emerging, dynamic and competitive market may have an impact on its business and prospects.

Depending on partners for revenue - There is no assurance that its Insurer and Lending Partners will offer all of their products and services on its platforms, or that the insurance and credit products and services will cater to the needs of potential or existing Consumers. If consumers do not find their desired products at attractive prices and terms or find their experiences dissatisfactory, they may lose trust in the company and turn to other channels for their insurance and credit needs. 

Harm to brand - Any harm to its brand, failure to maintain and enhance brand recognition or reputation, or failure to do so in a cost-effective manner may materially and adversely affect its business and results of operations.

INDmoney Analysis

PB Fintech has reported a healthy 80% CAGR rise in revenues from Rs 492 crore in FY19 to Rs 887 crore in FY21, backed by a robust rise in insurance commission income. While the company has not yet reported a profit, the loss has narrowed from Rs 347 crore in FY19 to Rs 150 crore in FY21. Investors should bear in mind that the company could continue to report losses over the medium-term.

The company’s founder has hinted that the focus is right now on growth, and not on profitability, as the insurance industry remains underpenetrated. Since its inception, the company has grown to become India’s largest digital insurance marketplace, with a market share of 93.4% (based on the number of policies sold). 

As it is not profitable, valuing the company on the basis of P/E is not possible. At the higher end of the price band, the issue is aggressively priced at 45 times Price/ Sales (based on FY22 annualised sales). However, given a fancy for novel tech-based startups, the issue could enjoy premium valuation. Given the euphoria for this issue, the shares had been trading in the range of Rs 2,100- Rs 2,300 in the unlisted market last week. Investors with a higher risk-appetite looking to take exposure to a niche tech-based platform should consider investing in the issue.