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Business News/ Markets / Stock Markets/  Policybazaar eyes IPO of 4,000 crore
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Policybazaar eyes IPO of ₹4,000 crore

The firm is targeting a valuation of $3.5 bn via a stake dilution of 15%
  • At least six merchant bankers are expected to be given the mandate to manage the proposed IPO
  • Yashish Dahiya, chief executive officer, Policbazaar.Premium
    Yashish Dahiya, chief executive officer, Policbazaar.

    MUMBAI : Policybazaar, the country’s largest insurance aggregator, is set to list on the bourses via a 4,000 crore initial public offering, which will see it dilute a 15% stake while seeking a valuation of almost $3.5 billion, two people with direct knowledge of the company’s plans said.

    Etechaces Marketing and Consulting Pvt. Ltd, the parent of Policybazaar and Paisabazaar, invited proposals from at least eight investment banks for the proposed IPO and will shortlist the merchant bankers for its public offer next month, one of the two people said on the condition of anonymity.

    “At least six merchant bankers are expected to be given the mandate to manage the IPO. The company has a vast loyal customer base, so renewals generate revenues; the number is increasing steadily as more people are preferring to transact online for safety, ease of understanding products; saving time by availing instant neutral advice from the aggregator by comparing plans before buying suitable insurance. Its growth prospect is very high as the major portion of India’s population is still underinsured," he added.

    Despite the Centre’s initiatives to offer health insurance plans for the less privileged, overall insurance penetration in India still remains abysmally low at around 4% as in 2017, according to state-owned India Brand Equity Foundation. “The momentum in the secondary market coupled with the above-mentioned factors, may help Policybazaar’s IPO to attract investors," the first person said.

    Policybazaar’s latest financials are yet to be disclosed. But, it had said last July that it expects to return to profitability in FY21 on the back of a demand surge for insurance products amid the covid-19 pandemic.

    In FY21, the company expects to post revenue of 1,100 crore and a marginal profit. It also estimates insurance premium collection for the current fiscal year to be at 6,000 crore from 4,000 crore in FY20.

    Policybazaar was profitable in FY18, but in the following two financial years, it did not make profits. Despite booking a loss, its revenue jumped three-fold while it doubled both market share and valuation at the end of FY20, said Yashish Dahiya, chief executive of Policybazaar, in a statement last year.

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    ABOUT THE AUTHOR
    Anirudh Laskar
    Anirudh reports on significant corporate matters including large mergers and acquisitions, India's emerging e-commerce sector and regulatory issues in the corporate and financial services industry. Over the past 17 years, he has covered many beats including banking, NBFCs, aviation, automobile, insurance, markets, SEBI, IRDAI, mutual funds, investment banking, private equity, deals, and conglomerates.
    Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
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    Published: 16 Feb 2021, 05:03 AM IST
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