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GMP, subscription status, other details. Should you subscribe?

PB Fintech, which operates the Policybazaar online insurance platform and the Paisabazaar loan comparison portal, opens for an initial public offering (IPO) today. The three day share sale has set a price range of 940-980 and the issue will be completed on November 3rd. The company said Friday that it raised a little more 2,569 crore from anchor investors prior to going public.

Policybazaar IPO was 54% subscribed on the first day of subscription on Monday. The share for qualified institutional buyers (QIBs) was 56 percent, for non-institutional investors 6 percent and for private investors (RIIs) 1.18 times.

the 5,710 crore IPO includes a new edition of Shares worth 3,750 crore and an offer to sell  -prox 1,960 crore from existing shareholders. PB Fintech is the leading online platform for insurance and credit products and offers access to insurance, credit and other financial products.

According to market observers, Policybazaar shares were available at a premium (GMP) of 150 on the gray market. The company plans to list on the leading NSE and BSE stock exchanges on November 15th.

“Insurance macro macros are positive, as are PBFL fundamentals. The company, with its dominant position in the digital insurance and credit market, is expected to benefit from the numerous business opportunities in both markets. At a higher price band of Rs. 980, PBFL is asking for an EV / TTM sales multiplier of 40.5x which seems very stretched. In light of the above observations, we are rating the issue “long term subscription,” said Choice Broking.

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

“So far in FY21, Policybazaar has won new customers and maintained its leadership position in the digital market with a unique 1.26 million visits to its platform. However, any public health threat such as the COVID-19 pandemic could have a detrimental effect on the business, financial condition, and if we look at Policybazaar’s overall business model and ratings over the past few years, a NEUTRAL rating on the matter would be most  -propriate ” said Ravi Singh, Head of Research & Vice President, ShareIndia

Assigned Anchor Investors include Goldman Sachs, Nomura, BlackRock Global Funds, Morgan Stanley, Canada Pension Plan Investment Board, Fidelity, Abu Dhabhi Investment Authority, ICICI Prudential Mutual Fund (MF), SBI MF, Axis MF and UTI MF Shares.

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