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Published on 28/10/2021 12:35:53 PM | Source: Samco Securities

Quote on Policy Bazaar IPO By Ms. Yesha Shah, Samco Securities

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Below is quote on Policy Bazaar IPO By Ms. Yesha Shah, Head of Equity Research, Samco Securities.

With strong brand equity, PB Fintech commands a stellar 93.4% market share in its digital insurance market place Policy Bazaar and a 51.4% in its digital consumer credit market place Paisabazaar. The company has delivered a notable 34% CAGR in its revenues and although it has expanded its contribution margin considerably from 8.6% to 39.8% over FY19 to FY21, it remains EBITDA negative. Considering the intensifying competition in the sector and certain larger players delisting their products from the platform, the key challenge for the company lies in shielding its market share and consistently scaling its revenue. Speaking about the valuation, the company is seeking a market cap of around 2.5 times of its last funding round in March’21. While the Insurance brokers license and the minimal online insurance penetration in India provide the company massive long term opportunities to grow, the current valuation seems pretty expensive. Hence, only investors with a longer time horizon, a larger risk tolerance and the patience to wait for the company's return ratios to improve should subscribe.

 

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