Policybazaar IPO: Online Insurance Aggregator Opens For Subscription Today. Should You Subscribe?

The company's share sale will be closed on Thursday, and it has fixed a price band of Rs940-980 for the issue.  

Policybazar IPO has opened today (Image: ANI)

New Delhi: PB Fintech, which operates one of the country's largest online insurance aggregator Policybazaar, has kicked off its initial public offering (IPO) for subscription on Monday.

On day 1 of the issue, it has been subscribed 0.09 times with retail category booked 0.46x and Qualified Institutional Buyers (QIBs) 0.01 times, BSE data showed at 11.25 AM.

The company's share sale will be closed on Thursday, and it has fixed a price band of Rs940-980 for the issue. The company offers people access to insurance, credit, and other financial products besides creating awareness about the financial impact of death, disease, and damage.

Here’s What Investors Should Know About The Issue

Last week, the company garnered a little over Rs 2,569 crore from anchor investors ahead of its IPO. The company is planning to list on leading stock exchanges NSE and BSE on 15 November.

The Rs5,710-crore IPO comprises a fresh issue of Rs 3,750 crore worth of equity shares and an offer for sale of about Rs 1,960 crore by existing shareholders.

PB Fintech is the leading online platform for insurance and lending products, offering access to insurance, credit, and other financial products.

According to markets experts, Policybazaar shares are available at a premium (GMP) of 150 in the grey market. The company aims to use the amount from the fresh issue towards enhancing visibility and awareness of the company's brands, to tap new opportunities, and expand growth initiatives to increase the consumer base including offline presence.

Of the entire issue, 75 per cent will be reserved for qualified institutional buyers, 15 per cent for non-institutional investors and the remaining 10 per cent for retail investors.

Experts believe that even as the insurance broker's license and the minimal online insurance penetration offer the company long-term business opportunities, the current valuation looks pretty expensive. Experts suggest that only investors with a longer time horizon and larger appetite for risk along with the patience to wait for the company's return ratios to improve should go ahead with the subscription.

Goldman Sachs, Nomura, BlackRock Global Funds, Morgan Stanley, Canada Pension Plan Investment Board, Fidelity, Abu Dhabi Investment Authority, ICICI Prudential Mutual Fund (MF), SBI MF, Axis MF, and UTI MF are among the anchor investors that have been allocated shares.