Policy Bazaar IPO

 

Policybazaar.com is now India’s largest insurance provider and a global leader in fintech. Even today, the goal remains the same: Client First and Long-Term Profitability for the overall insurance ecosystem. Policy Bazaar IPO Will hit the stock market in 01 November 2021.

About

It’s a delicate balancing act when 8 million insurance consumers and 40+ insurers trade a few lac crores of insurance cover and a few 1000 crores of insurance premiums with full trust on a website every year.

In India, insurance purchasers had a difficult time in 2008. Policy surrender fees benefited insurance companies, and the market as a whole was shrouded in mystery.

There was a lack of product information, accountability, mis-selling was rampant, insurance plans lapsed frequently, and clients had a general apathy toward the insurance industry.

That’s when a small group of people with no prior expertise in the insurance sector started reimagining what it could be.

Journey

They envisioned a site where users could get clear insurance information as well as the chance to research and compare insurance plans so that they could get exactly what they needed.

In a product as complex as insurance, every conversation must be recorded so that there is a clear audit trail of who said what.

All customer claims and services were processed through this site, which acted as a shared service layer. This diverse collection of people set out on their path through what is now Policybazaar.com with this ambitious goal in mind.

Across the country, they provide easy access to insurance, credit, and other financial goods.

Market Share

In 2008, they established Policybazaar, their flagship platform, in response to customer demand for more awareness, choice, and transparency, and to create a consumer-driven, provider-neutral insurance distribution strategy.

Policybazaar was India’s biggest online insurance marketplace in Fiscal 2020, according to Frost & Sullivan, with a 93.4 percent market share based on the number of policies sold.

Moreover, Policybazaar would account for 65.3 percent of all digital insurance transactions in India by volume in 2020.

They want to enable online research-based insurance and lending product purchases and promote transparency, allowing consumers to make educated decisions, through their consumer-centric strategy.

Paisa Bazaar

They created Paisabazaar in 2014 with the purpose of revolutionising how Indians obtain personal credit by emphasising ease, convenience, and openness in the selection of personal loans and credit cards.

Paisabazaar was India’s biggest online consumer credit marketplace, according to Frost & Sullivan, with a 51.4 percent market share based on disbursals in Fiscal 2020.

Paisabazaar is also frequently used to obtain credit scores, with around 21.5 million Consumers using their platform to obtain their credit score as of March 31, 2021.

The enormous and underserved online insurance and loan sectors are addressed by their Policybazaar and Paisabazaar platform services.

Policy Bazzar IPO

Policy Bazzar, headquartered in Gurgaon has submitted Draft Red Herring Prospectus(DRHP) to Securities and Exchange Board of India(SEBI) for initial public offering (IPO) of 6,017.50 Crore on 31 July, 2021.

There will be fresh issue of 3,750 Crore  & OFS (Offer for sale) of 2,267.50 Crore value equity shares from existing principal shareholders mentioned in the DRHP of the company.

They are now waiting for approval from Securities and Exchange Board of India(SEBI) to float the initial public offering (IPO) in the market.

Financials Trends

Particulars	For the year/period ended ( in Cr.)
		31-Mar-21	31-Mar-20	31-Mar-19
Total Assets		2,330.73	1,576	751.45
Total Revenue		957.41	855.56	528.81
Loss After Tax		( 150.24)	(304.03)	( 346.81)

Basic and Diluted Earnings Per Share (EPS)

Financial Period	Basic EPS (in INR)	Diluted EPS (in INR)	Weight
Financial Year 2021	(4.11)	4.11)	3
Financial Year 2020	(8.68)	(8.68)	2
Financial Year 2019	(12.01)	(12.01)	1
Weighted Average	(6.95)	(6.95)

Objects of the Issue

• Prepayment / repayment of all or a portion of the outstanding borrowings of the company to be availed on consolidated basis.
• To meet common corporate objectives.

Basis of the offer

The following are among the qualitative features that contribute into deciding the Offer Price:

• They’ve built powerful, consumer-friendly brands that provide a wide range of options, transparency, and convenience.
• Their Stack of Exclusive Technology, Data, and Expertise
• Insurer and Lending Associates Collaborative Partner
• They have unique self-reinforcing flywheels and tremendous network effects because of our size.
• High renewal rates ensure clear vision into future business and better economics.
• The advantages of segmented economies
• Low operating expenses and a capital-efficient model
• Founders with a clear mission who are supported by seasoned management

Policy Bazaar IPO Peer Comparison

There are no publicly traded firms in India that operate in a similar industry to theirs. As a result, a comparison with listed industry peers in regard to their firm is not possible.

Policy Bazaar IPO Details

IPO Opening Date	01 November 2021
IPO Closing Date	03 November 2021
Issue Type	Book Building
Face Value	INR 2 per share
IPO Price	940 to 980 per equity share
Market Lot	15
Min Order Quantity	15
Listing At	BSE, NSE
Issue Size	6,017.50 Crore
Fresh Issue	3,750 Crore
Offer for Sale	2,267.50 Crore

Policy Bazaar IPO Tentative Date

Policy Bazaar IPO opening date is 01 November 2021, and the closing date is 03 November 2021. The issue may list in 15 November 2021.

IPO Open Date	01 November 2021
IPO Close Date	03 November 2021
Basis of Allotment Date	10 November 2021
Initiation of Refunds	11 November 2021
Credit of Shares to Demat Account	12 November 2021
IPO Listing Date	15 November 2021

Basis of Allotment

Type	% of Offer	Basis of Allotment
Qualified Institutional Buyer	75%	Roughly  equivalent
Non Institutional Investor	15%	Roughly  equivalent
Retail	10%	Minimum level of 1 lot, based on availability, for every shareholder.

Policy Bazaar IPO Allotment Status

Allotment of equity stocks subject to the Fresh Issue and transfer of the Promoter Selling Shareholders’ OFS Stocks to the winning Bidders subject to the Offer for Sale. Nevertheless, the status of the allotment has yet to be revealed.

Here, you can find the Allotment Status of Policy Bazaar IPO.

Policy Bazaar IPO GMP

Policy Bazaar IPO Grey Market Premium is INR 122.

Date	GMP (in Rs)	Subject to Sauda	Kostak (in Rs)
14 November 2021	122	4700	4500
13 November 2021	110	3400	350
12 November 2021	59	2000	200
11 November 2021	57	1400	150
10 November 2021	40	1000	100
09 November 2021	94	4900	500
08 November 2021	96	3500	350
07 November 2021	89	1100	100
06 November 2021	81	1700	150
05 November 2021	89	2200	200
04 November 2021	105	2700	250
03 November 2021	120	1800	200
02 November 2021	135	3100	300
01 November 2021	171	5600	550
31 October 2021	149	5100	500
30 October 2021	155	4800	450
29 October 2021	140	2100	200
28 October 2021	150	2300	250
27 October 2021	175	1600	150
26 October 2021	210	–	–

Policy Bazaar IPO Review

Policy Bazaar IPO is Good or bad, it totally depends on your view. It is a company which you should subscribe to for the long term only. If you are interested only in listing gain then you might face volatility.

We will advise only risk taking traders to apply for listing gain or people who are not willing to take risk should avoid this IPO for listing gain.

Policy Bazaar IPO Risk

• A pandemic of COVID-19, or a related public health threat, might have a negative impact on their business.
• They work in a fast-paced, highly competitive online financial industry, making it impossible to forecast their future prospects.
• They’ve had a history of losses, and they expect future expenses to rise.
• Their insurance broking industry is governed by a number of rules and regulations, and their failure to comply with them could have a negative impact on their firm.
• Their company generates and analyses a lot of data, so any failure to protect confidential information will have a negative impact on their company.
• Their business may suffer if they are unable to attract, educate, and retain experienced personnel.

Other Threats

• Their future growth is contingent on the internet’s continued adoption as a viable platform for disseminating insurance goods.
• They may not be able to obtain more financing on favorable conditions or at all when they need it.
• Failure to adequately deal with any fraud committed on their platforms could have a negative impact on their business.
• They may be unable to sell their solutions if they are unable to use software licenced from third parties, including open source software.
• A credit crisis or a prolonged credit market collapse could have a major and negative impact on their business.
• Several of their subsidiaries, as well as some of their directors, are involved in legal procedures.

Policy Bazzar Platform

Consumers and Insurer Partners can buy and sell fundamental insurance products on their Policybazaar platform, which is available online.

On their Policybazaar platform as of March 31, 2021, 51 Insurer Partners had offered over 340 term, health, vehicle, house, and travel insurance products, representing a significant fraction of all licenced insurance companies in India.

Consumers can utilise Policybazaar for I pre-purchase research, ii) purchase, which includes application, inspection, medical check-up, and payment; and iii) post-purchase policy management, which includes claims facilitation, renewals, cancellations, and refunds.

Business Approach

They provide consumers with a wide range of options, transparency, and the ability to research and obtain insurance and personal credit solutions offered by their insurers and lending partners.

They have established strong brands in both Policybazaar and Paisabazaar that are recognised throughout India as a result of their consumer-centric strategy.

According to Frost & Sullivan, Policybazaar is a household name in the insurance industry and one of India’s most trusted insurance companies.

Clients who came to their platform directly or via direct online brand searches accounted for 83.0 percent of policies sold on Policybazaar and 66.0 percent of loans originated on Paisabazaar in 2021.

Market Overview

The entire premium market for insurance products in India is considered to be 7.6 trillion in Fiscal 2020 throughout life and non-life insurance, and is expected to expand at a CAGR of 17.8% to 39.0 trillion by Fiscal 2030.

In Fiscal 2020, the Indian insurance industry is substantially underpenetrated, with a life insurance market penetration of just 24.6 percent in terms of sum assured as a proportion of GDP, compared to 265.0 percent in the United States and 95.4 percent in China.

In 2019, India’s fatality protection gap was 83.0 %, one of the biggest in the world. In 2018, India’s health expenditure was at US$73 per capita, compared to US$1,111 & US$501 in the us & China, respectively.

Policy Bazaar IPO Brokerage views

• Yes Securities : Not Updated
• Choice Brokering: Not Updated
• Axis Securities: Not Updated
• IIFL Securities: Not Updated
• Trade swift: Not Updated
• Anand Rathi : Not Updated
• ICICI Securities: Not Updated

Policy Bazaar IPO Subscription Status

Date	Day	QIB	NII	Retail	Employees	Total Subscription
01 November 2021	1	0.62	0.07	1.23	N/A	0.58
02 November 2021	2	2.08	0.23	2.04	N/A	1.59
03 November 2021	3	24.89	7.82	3.31	N/A	16.58

Management

Their founders have a thorough awareness of the problems that their customers face as well as the structural issues that plague the insurance and financial services industries.

They each have nearly two decades of expertise and a strong desire to tackle such issues, as well as a thorough understanding of consumer insights and technology.

Their management team has extensive subject knowledge gained via their industry experience. Policybazaar and Paisabazaar are managed by separate management teams led by its founders.

Their entrepreneurial culture and unwavering focus on execution has helped them attract and retain talent to help them build their company and carry out their ambitions.

Principal Shareholder

• Makesense Technologies Limited

Principal shareholder’s  Holding

Pre Issue Share Holding	14.56 %
Post Issue Share Holding