Exclusive: Policybazaar to raise up to Rs 6,500 Cr via IPO; becomes a public company

This monsoon, the torrential rain of IPOs for consumer internet companies in India doesn’t look like it’s stopping anytime soon. After CarTrade, Zomato, MobiKwik and Paytm, SoftBank-backed online insurance aggregator Policybazaar is all set to go public. The Gurugram-based firm’s board has approved a fundraise of up to Rs 6,500 crore or $870 million through a public issue of shares. 

The company's board has passed a special resolution to convert it from private limited to public entity and rename the company as PB Fintech Ltd, regulatory filings show. The board has also approved another special resolution to raise up to Rs 6,500 crore via an IPO which will include both fresh issue and offer for sale from PB’s existing investors. 

Importantly, Policybazaar may follow some of its predecessors and raise a pre-IPO round with the number of shares offered in the IPO reduced to that extent. To streamline the public listing process, the company has increased the limit of investment by NRIs and OCIs from 10% to 24%, in the said filings. It has also converted its outstanding convertible preference shares into equity shares.

Queries sent to Policybazaar’s chief executive officer didn’t elicit any immediate response. We will update the story in case he responds.

Policybazaar’s IPO size would be the third among the recent lot of consumer internet companies who either made or are set to debut on domestic stock exchanges. While Zomato has already raised Rs 9,375 crore through its successful IPO, Paytm and Mobikwik are in the pipeline with plans to raise Rs 16,600 crore and Rs 1,900 crore respectively.

According to Entrackr’s sources, Kotak Mahindra Capital Co., Morgan Stanley, ICICI Securities and CitiBank are advising Policybazaar on the IPO and the company is likely to file its draft red herring prospectus or DRHP anytime soon.

Policybazaar recently got its insurance broking license from IRDAI, the insurance regulator, which is a significant upgrade on its web aggregator license till now. The broking license will enable the firm to venture into segments which it could not do in the past like claims assistance, offline services, and establish a Points of Presence network. That will also make the firm entitled to commission as well as a fee for web aggregation. 

During FY21, Policybazaar has invested Rs 36 crore in its Dubai-based subsidiary PB Fintech FZ LLC. The overseas entity has also shared its financial highlights for FY21. Gross revenue for PB Fintech FZ LLC stood at Rs 179.44 crore, separate regulatory filings show. 

Significantly, PB Fintech FZ LLC has posted a profit of Rs 18.93 crore (after tax). Policybazaar’s founder and chief executive Dahiya has stepped down as whole-time director to director as he has moved to the Dubai-based subsidiary.

For InfoEdge, which is a common and significant early investor in both Zomato and PolicyBazaar, the IPO will be its second opportunity this quarter to unlock its investment into a successful internet investment, making it a standout quarter indeed. It sold Rs 375 cr worth of shares in the Zomato IPO.