Policybazar IPO: The parent company of the online insurance platform Policybazar, PB Fintech Limited, is going to have an IPO soon. PB Fintech has submitted the Draft Red Herring Prospectus (DRHP) with market regulator SEBI for the Rs 6017.5 crore IPO. New shares worth Rs 3750 crore will be issued under the issue, while shares worth Rs 2267.5 crore will be issued under Offer for Sale (OFS).
According to the prospectus, this startup company with the investment of SoftBank Group Corporation can do private placement of shares worth Rs 750 crore. Private placement means that instead of selling the shares in the open market, they have to be sold to certain investors. Currently, no company is listed in the Indian market from the segment that PolicyBazaar is in. The weighted average return on net worth of the company stands at 23.57 per cent and the net asset value per equity shares as on March 31, 2021 was Rs 54.52.
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The money raised will be used for
According to the prospectus, Rs 1,500 crore raised through the IPO will increase public awareness of other brands including PolicyBazaar and try to increase its customer base by Rs 375 crore, including reaching customers through offline channels as well. Apart from this, the company will make strategic investments and acquisitions with Rs 600 crore and expand outside the country with Rs 375 crore. Apart from this, the company will use this fund for general corporate purposes.
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Better growth forecast in the insurance market
The insurance market in India is still very small as compared to the global level. In the financial year 2020, the insurance industry in India stood at Rs 7.6 lakh crore ($10.2 thousand crore) on the basis of total premium. By FY 2030, the industry is expected to grow at a CAGR of 17.8 per cent (Compound Annual Growth Rate) to Rs 30 lakh crore ($52 trillion). According to Frost & Sullivan, life insurance is projected to grow at a CAGR of 18.8 per cent, health insurance 15.3 per cent and other non-life insurance 13.5 per cent by 2030.
(Article: Surbhi Jain)