PolicyBazaar IPO: The issue of PB Fintech, which owns Policybazaar and Paisabazaar.com, is open today i.e. on November 1. The issue of the company is scheduled to close on November 3.
The price band of PolicyBazaar’s IPO has been fixed at Rs 940-980. One lot of issue of the company is of 15 shares. The allotment of its shares will take place on November 10 and its listing can be done on November 15.
Policybazaar is preparing to raise Rs 5709.72 crore from this IPO. It has a fresh issue of Rs 3750 crore. Whereas the shares of 1959.72 crores will be sold in Offer for Sale (OFS).
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1500 crore out of the fresh issue will be used to strengthen the brand. 375 crore will be used in search of new opportunities. Rs 600 crore will be used to fund strategic investments. Apart from this, Rs 375 crore will be used for expansion of business outside India. The remaining amount will be used for other activities related to the company.
In the offer for sale, SVF Python II (Cayman) will sell shares worth Rs 1875 crore. On the other hand, Yashish Dahiya will sell shares worth Rs 30 crore. While Alok Bansal will sell shares worth Rs 12.75 crore and Shikha Dahiya for Rs 12.50 crore. On the other hand, Rajendra Singh Kuhar will sell shares worth Rs 3.50 crore. With this, the company’s founder United Trust will sell 2.68 lakh shares. According to the upper price band of the issue, its value will be Rs 26.22 crore.
What should investors do?
According to KR Choksi, the best thing about the company is that it is working in a large market which has a lot of opportunities right now. The policy market is growing rapidly. The company is in a leadership position in the digital market place. The company has been successful in wooing new customers, which is benefiting it. In the fiscal year 2021, users visited the website more than 12.65 million times. The company has the ability to retain the customers. Along with this, the company is also benefiting from better relationship with insurance companies and lending partners.
Along with this, KR Choksi has also told about some of the concerns of the company. He said that people have lost their jobs due to coronavirus infection, due to which their ability to buy policies has reduced. The company has already incurred losses. Along with this, non-compliance of regulations is the biggest problem of its business.
KR Choksi advises to buy Policy Bazaar IPO for long term.
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Rajeev Kapoor, Vice President, Trustline Securities, said, “In terms of valuation, the P/E as per the upper price band after listing is 47.6 which is higher than the rival companies. Considering the business model and valuation of the company, Trustline Securities has given a neutral rating to the issue.
The company has set a valuation target of $5.5 billion-6 billion. Many big investors have invested money in Policybazaar. It has investments from SoftBank, Temasek, InfoEdge, Tiger Global and Premji Invest.
PolicyBazaar provides its customers with the facility to assess Auto, Health, Life Insurance and General Insurance policies. The policy market site attracts 100 million visitors every year and the company sells 4 lakh policies every month.
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