Shares of PB Fintech, the parent company of PolicyBazaar and PaisaBazaar, fell as much as 2 per cent to the day’s low price of Rs 1,314.65 in early trade on Friday. This comes after Policybazaar parent, PB Fintech’s top executives – Chairman Yashish Dahiya and Vice-Chairman Alok Bansal – offloaded 83.7 lakh shares, representing a 1.86 per cent stake in the company, through two block deals on May 17.
Out of the total stake sale, Dahiya sold 54 lakh shares, while Bansal offloaded the remaining 29.70 lakh shares. Post the stake sale, Dahiya’s holding in the company will come down to a 4.83 per cent stake, while Bansal will have a 1.63 per cent stake in PB Fintech.
Meanwhile, the block trade also triggered a 365-day lock-in before the two executives can execute another tranche of stake sale.
The company also stated that a significant portion of the proceeds from the sale is intended to cover the payment of taxes for both current and future ESOP exercises. ESOPs entail tax payments upon exercise, in addition to capital gains tax obligations from the sale of shares.
Back in June 2022, Dahiya had unloaded another 0.84 percent stake in the company at an average price of Rs 610.24 per share.
PB Fintech is engaged in providing integrated online marketing and IT consulting and support services largely for the financial services industry including insurance. It operates Policybazaar, India’s largest digital insurance marketplace, and Paisabazaar that provides services related to lending products.
During the March quarter of the previous financial year (Q4FY24), PB Fintech clocked a net profit of Rs 60.19 crore compared to a loss of Rs 9.34 crore in the corresponding period a year ago.
The revenue from operations of the company grew 25.4 per cent year-on-year (Y-o-Y) to Rs 1,090 crore in the quarter under review, compared to Rs 869 crore in Q4 FY23.
Core Platform business revenue jumped 32.6 per cent Y-o-Y off a high base (Q4FY23), led by a 39.5 per cent Y-o-Y surge in Core Platform premiums due to high sales of savings products. Despite strong growth in new health premiums, core adj. Ebitda margin improved 393bp Q-o-Q to 16.7 per cent, driving overall adjusted Ebitda to Rs 69 crore.
“While we are raising FY25/26 Ebitda by 57.4 per cent /41.8 per cent to build in higher growth and improved profitability, we maintain ‘Reduce’ rating on the stock given the stock’s rich valuation. However, we revise our target to Rs 1,160 (earlier Rs 790) to factor-in Q4 beat,” said analysts at Nuvama Institutional Equities in a post result note.
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