PB Fintech to invest Rs 1000 crore in Policybazaar and Paisabazaar, share price up 5%

PB Fintech’s Board of Directors has approved an additional investment of up to Rs 700 crore in one or more tranches in its wholly owned subsidiary – Policybazaar Insurance Brokers Ltd., during fiscal years 2021-2022 and 2022-2023 . In addition, the board of directors also approved an investment of up to Rs 299 crore in Paisabazaar Marketing and Consulting.

Illustration: TechStory × Freepik (raw pixel)

The announcement raised PB Fintech’s share price by 5% during Friday’s trading session. The company’s meter peaked at Rs 974.25, up from Rs 927.85 at the previous close on BSE. The company said in a regulatory filing that 45.37.205 capital shares of Rs 10 each would be issued to the company at a premium of Rs 541 per share of Policybazaar (PB Fintech). It will allocate 75 37 688 shares of Rs 10 each at a premium of Rs 388 of Paisabazaar.

According to PB Fintech, the existing investments will help strengthen the financial health of the two wholly owned entities and cover their general operating expenses, as well as improve brand awareness, strategic initiatives and office presence. Paisabazaar’s revenue in FY21 was Rs 188.32 crore, compared to Rs 226.19 crore in FY20, according to the filing. Policybazaar’s revenue in FY21 was Rs 606.94 crore, compared to Rs 515.92 crore in 19.

Policybazaar, founded in 2008 by Yashish Dahiya, Avaneesh Nirjar and Alok Bansal. It bundles insurance policies from a range of providers for use cases like life insurance, health insurance, auto insurance, among others. PB Fintech, the parent company of the Policybazaar and Paisabazaar platforms, is India’s largest online marketplace for insurance and loan products, harnessing data, technology and innovation. It aims to raise awareness among Indian households of the financial impact of death, illness and damage by providing easy access to insurance policies, credit, among other financial services.

Meanwhile, Paisabazaar.com, a digital consumer credit marketplace, has consolidated its partnership with Axis Bank to introduce a pre-qualified program for unsecured loans on its platform. Paisabazaar.com’s pre-qualified program involves significant technological and analytical collaboration with banks and non-bank financial corporations (NBFCs), allowing certain clients to view personalized and pre-qualified loan offers on the platform of fintech.

Paisabazaar has more than 50 partnerships with major banks, major NBFCs, and fintech lenders to provide consumers with a diverse range of lending options on its platform. According to Frost & Sullivan, Paisabazaar was the largest consumer credit market in India in FY2020, with a 51.4% market share based on disbursements.

Axis Bank clients, both salaried and self-employed, eligible for pre-qualified personal loans from the bank, will now be able to browse and register for the same offers on the Paisabazaar platform. This integration would result in instant credit for these selected consumers through an end-to-end digital process that can be approved with the click of a few buttons on Paisabazaar.

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