Stocks

SEBI approves Policybazaar parent PB Fintech’s ₹6,017-crore IPO

K.R.Srivats New Delhi | Updated on October 19, 2021

India IPO mop-up in first nine months at a 20-year high of $9.7 billion this CY

PB Fintech Ltd, parent of India’s largest online insurance aggregator Policybazaar, added to the flurry of activity in the IPO market with the SEBI’s approval to launch its ₹6,017.50 crore public offering. India has achieved a record IPO fund raise of $9.7 billion from 72 IPOs in the first nine months this calendar year. This record is in addition to the huge flows into the private equity space this year. This is the highest first nine months IPO proceeds in the last 20 years, according to a latest EY Global IPO trends report.

The PB Fintech IPO, which will most likely hit market around Diwali, comprises fresh issue of equity shares worth ₹3,750 crore and an offer for sale of ₹2,267.50 crore by existing shareholders and promoters. The company, which had filed its draft prospectus with SEBI on August 2, has now received communication from the market regulator conveying its go ahead for the IPO, a company official confirmed on Tuesday.

Policybazaar, which is backed by marquee investors including Softbank, Temasek, Info Edge, Tiger Global and Premji Invest, has now joined a growing list of new economy and tech based start-ups that are looking to tap the IPO market in October-November by riding on the ongoing bullish sentiment in the Indian market. The other investors includes True North, Steadview Capital, Inventus and Wellington Management.

Several new economy and tech based IPOs besides PB Fintech are slated to hit the market in the upcoming season. SEBI has already, in the last one month, given a go ahead to a large number of high profile IPOs including Nykaa, Adani Wilmar, Fino Payments Bank, Mobikwik and Star Health Insurance. The ₹16,600 crore mega IPO of Paytm (One 97 technologies) is also expected to soon hit the market.

IPO Frenzy

Prashant Singhal, Emerging Markets, Technology, Media, Telecom (TMT) Leader, EY said, “The Indian IPO market has been on a bullish run and has witnessed one of the most active quarters (July-September 2021) since Q4 2017. The outlook for the next quarter remains positive with several new economy and technology-driven IPOs expected. Equity indices at an all time high are giving a boost to the primary market.”

The most active sector was diversified industrial products with 15 IPOs followed by the consumer product technology sector with eleven IPOs. The three largest IPOs in terms of proceeds were Zomato, Nuvoco, Vistas and Chemplast Sanmar. Rahul Bhuskute, Chief Investment Officer, Bharti AXA Life Insurance said that many good quality companies have raised money in the recent IPOs. Markets are giving better than peers valuations to companies which have strong growth projections and high degree of corporate governance.

“Digital companies need to be looked at from a different perspective. These are high risk investments, however these companies typically have a high degree of moat and a strong management pedigree, and will hence succeed over other companies,” he said.

Sharad Agarwal, Executive Director-Capital Markets, Knight Frank India said that the IPO boom has been triggered by a strong bull run in the Indian stock markets driven by greater clarity on Covid-19 due to the rising pace of vaccination and low Covid-19 cases. People are therefore not foreseeing another lockdown, he added.

Published on October 19, 2021

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