BackPolicybazaar shares marginally lower; CLSA initiates coverage
Analysts were predicting a big sell-off in shares of Policybazaar akin to that seen in Nykaa
PremiumMumbai: Shares of PB Fintech, popularly known as Policybazaar, traded marginally lower a day after its pre-IPO investor lock-in ended. Foreign brokerage CLSA has, meanwhile, initiated coverage on the stock.
The stock traded at ₹387.35, down 0.2% on the National Stock Exchange. The benchmark indices were also flat in early trade on Wednesday.
“PB Fintech, which operates online insurance and credit comparison portals Policybazaar and Paisabazaar, is one of India's leading direct-to-consumer insurance aggregators," CLSA said in its coverage note.
"Its moats include a robust customer funnel, a high share of direct customer traffic and strong underwriting to insurers. We expect an above-10% Cagr in the broader insurance industry over 15 years and see PB Fintech as a key beneficiary of the growing share of online insurance distribution (over-30% Cagr). We initiate coverage at BUY with a Rs600 target, implying 50% upside," the brokerage firm added.
Analysts were predicting a big sell-off in shares of Policybazaar akin to that seen in Nykaa, whose bonus shares began crediting in investor accounts on Tuesday after the record date for bonus was shifted a day later to the anchor lock in ending.
"PB Fintech could also see a volatile day tomorrow as investors want to reduce their exposure to loss-making new-age companies which have significantly underperformed the market," said Rajesh Palviya, VP (head of research), Axis Securities.
PB Fintech hit a 52-week low of ₹367.50 on 10 November, falling from a 52-week high of ₹1470 from a year ago, causing a huge loss to investors in the stock.
Retail investors held 2.99% of the shares as of September end and MFs held 4.68% of its equity.
Tiger Global Management on 11 November said it has divested 3.5% stake in PB Fintech for nearly ₹606 crore through open market transactions.
According to bulk deal data available with the NSE and BSE, funds managed by Tiger Global -- Tiger Global Eight Holdings and Internet Fund III Pte -- sold a total of 1,60,56,422 shares in the company.
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