SoftBank to Offload 2.5% Stake in PB Fintech through Block Deal

On October 6, 2023, SoftBank executed a block deal, selling a 2.5% stake in PB Fintech for ₹871.2 crore. The block deal involved 1.14 crore shares of PB Fintech, the parent company of PolicyBazaar. PB Fintech shares were trading at ₹765.45 down 0.2% on NSE at the time of writing, SoftBank, however, clarified that this move is not an exit but rather a partial stake sale.

SoftBank Sells Stake in PB Fintech

The offer price for the block deal ranged from ₹752 to ₹767 per share, representing a discount of 0-2% compared to the previous closing price of Rs 767 per share. According to recent data, SVF Python II (Cayman) Limited, a SoftBank entity, previously held a 4.39% stake in PB Fintech. This fresh block deal is expected to reduce their holding to approximately 1.85%, in its previous stake sale in December 2022, where they sold a 5.1% stake in PB Fintech through an open market transaction, with buyers including Goldman Sachs Singapore Pte, Societe Generale, Morgan Stanley Mauritius, and Max Life Insurance Company.

PB Fintech's stock, which initially debuted with a 17% premium at ₹1,150 in November 2021, faced challenges in maintaining its premium value. Although it hit 52-week low of ₹356.20 in November 2022, it has since rebounded and is currently trading at around ₹770. Over the past year, PB Fintech's share price has risen by 56.82% but remains below its 52-week high and listing price. From a technical perspective, PB Fintech's relative strength index (RSI) stands at 53.7, indicating it's neither overbought nor oversold, with average volatility.

PB Fintech Q1 Results

In the June quarter end, PB Fintech reported a reduction in its net consolidated loss for Q1 2023, with a remarkable 94% year-on-year decrease to ₹11.9 crores, compared to a net loss of ₹204 crores in the same quarter the previous year, revenue also rose by 39% compared to the corresponding period in the previous year, with operating revenue grew by 31%  year-on-year to ₹666 crores. While PB Fintech's earnings have been declining at an average annual rate of -26.2%, the insurance industry saw earnings growth of 5.3% annually, reflecting the evolving dynamics within the sector.

Previously Tencent Reduces Stake in PB Fintech

In May this year, Tencent Cloud Europe BV, a prominent stakeholder in PB Fintech, decreased its ownership in the company by 2.09 percent through open market transactions. This reduction brings Tencent Cloud Europe's stake in PB Fintech, down from 8.37% to 6.28%, the transaction valued at ₹561.8 crore, occurred on May 26 at an average price of ₹596.7 per share, as per bulk deal data. 

About PB Fintech

PB Fintech, also known as PolicyBazaar Fintech Private Limited, is a prominent player in India's digital insurance and financial services sector, It operates two primary online platforms Policybazaar and Paisabazaar. It is one of India's largest online insurance marketplaces, enabling consumers to compare and purchase a wide range of insurance policies, including health, life, car, and travel insurance and simplifies the insurance buying process and offers access to numerous insurance products from various providers. on the other hand, it focuses on personal finance and provides services related to loans, credit cards, savings accounts, fixed deposits, and more. It empowers users to compare and apply for various financial products, promoting informed financial decision-making.

Founded in 2008, PB Fintech has garnered significant investments from domestic and international investors, including SoftBank and Tencent. It operates from Gurugram, India, and has revolutionized the Indian financial services ecosystem by leveraging technology to enhance transparency, accessibility, and choice for consumers. Its platforms have made a substantial impact on the insurance and personal finance sectors in India, offering consumers a convenient and efficient way to manage their financial needs.