Policybazaar files DRHP with Sebi, aims to raise over Rs. 6,000 crore via IPO

The parent company of Policybazaar and Paisabazaar, PB Fintech, has filed a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (Sebi) to raise Rs. 6,017.50 crore (US$ 809.06 million) through an initial public offering (IPO).

The IPO would include a Rs. 3,750 crore (US$ 504.19 million) new issuance of shares and a Rs. 2,267.5 crore (US$ 304.86 million) offer for sale of shares from investors and current shareholders.

SVF Python II (Cayman) Limited is one of the selling investors, selling shares worth Rs. 1,875 crore (US$ 252.09 million), while other shareholders would sell shares worth Rs. 392.50 crore (US$ 52.77 million), with Mr. Yashish Dahiya, the company's Chairman and CEO, selling shares for Rs. 250 crore (US$ 33.61 million).

According to the company's DRHP, funds raised from the public offering (fresh issue) will be used to increase brand visibility and awareness, including but not limited to Policybazaar and Paisabazaar, as well as new opportunities to expand the consumer base, including offline presence, strategic acquisitions, and investments, expanding presence outside India, and general corporate purposes.

Prior to submitting the red herring prospectus with the registrar of companies (RoC), company had also stated that it may contemplate issuing further equity shares through a private placement for a total of up to Rs. 750 crore (US$ 100.83 million). 

The issue's book running lead managers are Kotak Mahindra Capital, Morgan Stanley, Citigroup Global Markets India, ICICI Securities, HDFC Bank Ltd, IIFL Securities, and Jefferies India.

In FY21, the firm reported losses of Rs. 150.24 crore (US$ 20.19 million), according to the corporation. “Given the expenditures needed to develop our business, we expect our costs to rise over time and our losses to continue,” it added.

In FY20, the firm lost Rs. 304 crore (US$ 40.87 million), while losses in FY19 were Rs. 346.8 crore (US$ 46.62 million).

In FY21, the business spent Rs. 367.84 crore (US$ 49.45 million) on advertising and marketing, according to its DRHP. Similarly, advertising and marketing costs were Rs. 445.2 crore (US$ 59.85 million) in FY20 compared to Rs. 345.85 crore (US$ 46.50 million) in FY19.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.