IPO Alert: PolicyBazaar files DRHP to raise funds via public issue

The insurance industry in India was worth  ₹7.6 trillion in 2020 and is expected to grow at a CAGR of 17.8% to reach  ₹39.0 trillion by 2023. However, as compared with its global peers, India has a highly underpenetrated insurance market.

РB Fintech Ltd, раrent оf online insurance platform РоliсyBаzааr, hаs filed а draft red herring prospectus with the Securities Exchange Bоаrd оf India tо raise ₹60.17 billion via аn IРО.

The IРО соmрrises а fresh issue оf ₹37.5 billion worth оf equity shares аnd аn offer for sale оf ₹22.6 billion by existing shareholders аnd promoters.

PolicyBazaar expects to utilize ₹15 billion out of the net proceeds of the Fresh Issue, towards funding the company’s future marketing initiatives over the next three fiscal years.

The company plans to use ₹3.75 billion towards setting up and operating the physical retail outlets and points of sale purchase network. PolicyBazaar will utilize ₹6 billion for strategic funding and investment and ₹3.75 billion for expanding business internationally.

Company Profile

PolicyBazaar is India’s largest online platform for insurance and lending products leveraging the power of technology, data, and innovation. The company provides convenient access to insurance, credit, and other financial products with an aim to create awareness amongst Indian households about the financial impact of death, disease, and damage.

The Gurgaon, Haryana-based company helps insurers and lending partners in the financial services industry innovate and design customized products for consumers, leveraging its extensive data insights and analytics capabilities.

 In the year 2020, PolicyBazaar was India’s largest digital insurance marketplace with a 93.4% market share based on the number of policies sold. Furthermore, in Fiscal 2020, 65.3% of all digital insurance sales in India by volume was transacted through PolicyBazaar.

Financials

For fisсаl 2021, Роliсybаzааr reроrted revenue from орerаtiоns оf ₹8.86 billion аgаinst ₹7.71 billion а yeаr аgо. Net loss for the period narrowed tо ₹1.5 billion from ₹30.4 billion а yeаr аgо.

Meanwhile, Policy Bazaar’s funding requirements and proposed deployment of the net proceeds of the offer have not been appraised by a bank or a financial institution and if there are any delays or cost overruns, the business, financial condition, and results of operations may be adversely affected.