November 27, 2021

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PB Fintech anchor book: Domestic private Insurers give thumbs up

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Indian private life insurers made a beeline to participate in the anchor investor segment of the IPO of PB Fintech, which operates online insurance marketplace Policybazaar and credit comparison portal Paisabazaar.

This reflects the optimism that private life insurers have in future prospects of the online marketplace model that PB Fintech had adopted, said capital market experts.

Significant interest

Eleven insurance companies (9 life insurance companies and 2 health insurance companies) made a demand of $40 million in the anchor round that took place on Friday, sources close to the development said.

In all, the anchor round was for $340 million with overall demand coming in at $14 billion, they added. Finally, as part of the anchor round, the company allocated 2,62,18,079 equity shares at the upper price band of ₹980 per share to raise ₹2,569.37 crore from 155 marquee anchor investors.

Top insurers who got sizeable allocation in the anchor round include Bajaj Allianz Life Insurance Company (3,82,590 shares or 1.46 per cent of the anchor investor portion), HDFC Life Insurance Company (1.46 per cent), ICICI Prudential Life Insurance Company (1.46 per cent), SBI Life Insurance Co Ltd (1.46 per cent), Bharti AXA Life Insurance (0.82 per cent), Kotak Mahindra Life Insurance (0.82 per cent), CARE Health Insurance (0.39 per cent) and Max Bupa Health Insurance (0.39 per cent).

Besides these top insurers, life insurers like Max Life Insurance, TATA AIA Life Insurance and Edelweiss Tokio Life Insurance have participated in the anchor book through the investment funds that they manage.

Also see: PB Fintech plans to set up offline physical centres to complement online channel

Anchor investors who have been allocated shares in the anchor tranche include New World Fund, Blackrock, Tiger Global, Nomura, Goldman Sachs, Morgan Stanley, among others.

The ₹5,710 crore IPO comprises a fresh issue of ₹3,750 crore worth of equity shares and an offer for sale of about ₹1,960 crore by existing shareholders. The IPO has come with a price band of ₹940–980 and will open for public and other institutional investors from November 1–3.

Of the entire issue, as much as 75 per cent will be reserved for qualified institutional buyers, 15 per cent for non institutional investors and the remaining 10 per cent for retail investors.

Digital model

Srinath Sridharan, Corporate Advisor & Independent Markets Commentator, told BusinessLine that the line-up of insurance players as anchor investors is an indication of their support to this business that engages in digital distribution and information intermediation of insurance.

“Apart from this, it’s could be a strong quasi-Banca (bancassurance) model of showcasing interest between platforms and brands. The platform is a robust one and has built credible model and consumer engagement,” he said.

Having said that, it would be interesting to see how insurance players who are investors in this actually play out the digital insurance model in times to come, he added.

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