PolicyBazaar to raise Rs 6,500 crore via IPO

The parent company of the online insurance marketplace PolicyBazaar, PB Fintech, has converted to a public limited company. The board of directors of the Gurugram-based company has approved a public share issue to raise up to Rs 6,500 crore ($870 million). Particularly, PolicyBazaar is the only entity to go public under the PB Fintech banner.

As it plans to go public in December, the company is expected to file a Draft Red Herring Prospectus (DRHP) with market regulator Securities and Exchange Board of India (Sebi) soon.

According to regulatory filings, the company's board of directors passed a special resolution to convert it from a private limited company to a public entity and rename it PB Fintech Ltd. The board also approved a special resolution to raise up to Rs 6,500 crore through an IPO that will include both a fresh issue and an offer for sale from PB's existing investors.

Policybazaar's IPO is being advised by Kotak Mahindra Capital Co., Morgan Stanley, ICICI Securities, and CitiBank, and the company is expected to file its draught red herring prospectus or DRHP, soon.

At the Extraordinary General Meeting (EGM) on July 5, PB Fintech was also approved for an IPO.

Notably, Policybazaar may follow in the footsteps of some of its predecessors and raise a pre-IPO round, with the number of shares offered in the IPO reduced accordingly. In the said filings, the company increased the limit of investment by NRIs and OCIs from 10% to 24% in order to streamline the public listing process. It has also converted all of its outstanding convertible preference shares into common stock.

The size of Policybazaar's IPO would be the third largest among the recent crop of consumer internet companies that have either debuted or are about to debut on domestic stock exchanges. While Zomato has already raised Rs 9,375 crore through its successful IPO, Paytm and Mobikwik have plans to raise Rs 16,600 crore and Rs 1,900 crore, respectively, in the near future.

Yashish Dahiya, Alok Bansal, and Avaneesh Nirjar of the Indian Institute of Technology-Delhi and the Indian Institute of Management-Ahmedabad founded PB Fintech (formerly known as EtechAces Marketing and Consulting) in 2008.

PolicyBazaar, an online platform for users to purchase insurance policies, is one of PB Fintech's subsidiaries. PB Fintech's other subsidiaries include the online lending platform PaisaBazaar (founded in 2014) and health tech venture DocPrime (founded in 2018), which allows visitors to book consultations with doctors and schedule a variety of medical tests.

Policybazaar recently received an insurance broking license from IRDAI, the insurance regulator, which represents a significant upgrade from its previous web aggregator license. It will allow the firm to enter previously untapped markets such as claims assistance, offline services, and the establishment of a Points of Presence network.

To date, PolicyBazaar has raised approximately $766 million. In March of this year, it was reportedly valued at $2.4 billion after raising $45 million through a secondary share sale from private equity (PE) firm True North and a few other individual investors.

Tiger Global Management, SoftBank, Tencent, Wellington Management, PremjiInvest, and Falcon Edge Capital are among the company's investors.

Policybazaar invested Rs 36 crore in its Dubai-based subsidiary PB Fintech FZ LLC during FY21. The overseas entity has also released its FY21 financial highlights. According to separate regulatory filings, PB Fintech FZ LLC's gross revenue was Rs 179.44 crore.

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• After Mobikwik, Paytm files DRHP to raise Rs 16,600 crore via IPO

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