Indian insurtech firm PolicyBazaar’s parent plans to raise over $800m in IPO

PB Fintech, the parent firm of online insurance marketplaces PolicyBazaar and PaisaBazaar, has filed a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India to raise US$809 million through an initial public offering (IPO).

Yashish Dahiya, founder and CEO of PolicyBazaar / Photo credit: PolicyBazaar

With this filing, PB Fintech becomes the fourth Indian startup to initiate IPO proceedings in the past few weeks after Zomato, Paytm, and Mobikwik. Zomato, which went public last month, was oversubscribed 38.25 times.

PB Fintech is looking to secure US$504 million in a fresh issue, while the remaining US$305 million will be raised through a secondary sale of its shares, according to company filings. It could also consider raising up to US$100 million in a pre-IPO round, it added.

Backed by investors such as SoftBank, Tencent, and Temasek, PolicyBazaar is an aggregator platform that allows users to compare and buy life, health, travel, auto, and property related policies. PaisaBazaar helps customers compare products such as loans, insurance plans, and credit cards.

India is the world’s 10th largest life insurance market in terms of total premium, with its worth hitting US$76 billion in the financial year ended 2020. As of March 2020, however, life insurance penetration in the country remains lower at 24.6% compared to 265% in the US and 95.4% in China when measured in terms of sum assured as percent of gross domestic product, according to PB Fintech.

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“India’s life insurance market is expected to grow at 18.8% per annum to reach US$425 billion in FY 2030, driven by favorable macro indicators, rising awareness towards financial products and services, digitization, and simplification of products and processes, online channels for distributions, innovations and customizations in products, and favorable government policies and regulatory push,” PB Fintech said in filings.