Bazaar Subscription PolicyPolicyBazaar is one of several Indian tech startups looking to go public in 2021

by Salman SH

PB Fintech, the parent company of insurance pool PolicyBazaar, on Tuesday received approval from the Securities and Exchange Board of India (Sebi) to raise Rs 6,017.50 crore through an initial share sale.

A company spokesperson confirmed the development for FE but did not elaborate further on the upcoming initial public offering (IPO).

PB Fintech submitted draft papers for its proposed initial public offering in August which included a new issuance of Rs 3,750 crore shares of stock and an Offer to Sale (OFS) of Rs 2,267.50 crore by existing investors and promoters.

The company’s current investor, SoftBank, which holds a 9.45% stake, will offload shares worth Rs 1,875 crore, while PolicyBazaar founders Yash Dahia and Aluk Bansal will sell shares worth Rs 345 crore in the IPO next year.

Three other promoters are also expected to offload shares worth Rs 47.5 crore, according to a draft of the company’s red herring prospectus. The company is seeking a valuation of about $6 billion.

PolicyBazaar’s DRHP also said that the company may consider raising approximately Rs 750 crore via a private placement of equity shares prior to the IPO.

Proceeds from the new release will be used to enhance visibility and awareness of the company’s brands to seek new opportunities to expand growth initiatives to increase the consumer base, including offline presence.

In addition, the proceeds will be used to fund strategic investments and acquisitions, expansion of the presence outside India and other general purposes of the company.

Kotak Mahindra Capital, Morgan Stanley India, Citigroup Global Markets India, ICICI Securities, HDFC Bank, IIFL Securities and Jefferies India are the lead bookrunners for the company’s proposed IPO.

In fiscal year 21, PolicyBazaar’s parent company reported Rs 957.4 crore in revenue and a loss of Rs 150 crore, which has been cut by nearly half compared to the loss of Rs 304 crore reported in fiscal year 2020.

However, the company stated in the prospectus that it expects “costs to increase over time and our losses will continue given the expected investments to grow our business.”

PolicyBazaar, founded in 2008 by IIT Delhi and IIM Ahmedabad alumni of Dahiya, Bansal and Avaneesh Nirjar, has raised nearly $760 million in equity funding to date. Its notable investors include names like FalconEdge, Tencent, Temasek, InfoEdge and others.

The Gurgaon-based company aggregates insurance and lending products through two online platforms including PolicyBazaar and Paisabazaar. The group also operates a third entity called DocPrime (EtechAces Marketing and Consulting Pvt Ltd) that offers online physician consultation and home lab tests.

PolicyBazaar is one of several Indian tech startups looking to go public in 2021. Apart from PolicyBazaar, startups including OYO Rooms, MobiKwik, Paytm, Nykaa and Delhivery are expected to go public this year. .

The number of startups seeking to go public has increased dramatically in the past few months, thanks to SEBI’s recent relaxation of loss-making entities looking to go public.

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