PB Fintech Limited: history, ownership, mission, how it works & makes money

A Brief History of PB Fintech Limited

Founded in 2014, PB Fintech Limited is known for its flagship brand, Policybazaar, which operates as an online insurance aggregator. The company was established with the goal of simplifying the insurance purchasing process in India.

In 2021, PB Fintech became the first online insurance aggregator to go public in India. The company launched its IPO on November 15, 2021, raising approximately ₹5,700 crores (around $763 million). The IPO was oversubscribed by 16.6 times, indicating strong investor interest.

For the fiscal year 2022, PB Fintech reported revenues of ₹1,217 crore, a significant increase from the previous year’s ₹949 crore. The net loss for the year was reported at ₹102 crore, an improvement from the loss of ₹125 crore in the fiscal year 2021.

As of the end of 2022, PB Fintech had a customer base exceeding 100 million users, showcasing its significant market penetration within the Indian insurance sector. The company continued to capitalize on its digital platform, facilitating policy comparisons and purchases across various insurance types, including health, life, and auto insurance.

In September 2023, PB Fintech reported a revenue growth of approximately 30% year-over-year in the first quarter, indicating a robust demand for its services despite market fluctuations. Operating losses narrowed to ₹40 crore compared to ₹60 crore in the same quarter of the previous year.

The company has also diversified its offerings, venturing into financial products like mutual funds and loans, enhancing its revenue streams. Executives noted plans to further invest in technology and expand their product lineup to address a wider array of customer financial needs.

In terms of stock performance, PB Fintech's shares debuted at ₹980, and as of October 2023, the stock price fluctuated around ₹600, reflecting industry challenges and broader market conditions.

Overall, PB Fintech's trajectory has been marked by rapid growth, strategic diversification, and an ongoing commitment to enhancing customer experience in the financial services sector.

A Who Owns PB Fintech Limited

PB Fintech Limited, known primarily for its flagship product Policybazaar, is a publicly traded company on the National Stock Exchange (NSE) of India under the ticker symbol POLICYBZR. As of October 2023, the company has demonstrated significant growth in its operations and market capitalization.

The ownership structure of PB Fintech Limited reflects a mixture of institutional and retail investors. The latest filings show that approximately 33.8% of the company is owned by promoters, while 30.5% is held by foreign institutional investors (FIIs). Domestic institutional investors (DIIs) hold around 16.3%, with retail investors owning about 19.4%.

Within the promoter category, significant stakeholders include the founders, Yashish Dahiya, Alok Bansal, and Avaneesh Nirjar. The latest reports indicate that Yashish Dahiya holds approximately 9.9% of the company.

In terms of financial performance, PB Fintech Limited reported a revenue of approximately INR 848.9 crore for the financial year ending March 2023, marking a year-on-year growth of about 40%. The net profit for the same period was around INR 19.5 crore, showcasing a positive trajectory in profitability.

The company’s market capitalization as of October 2023 is approximately INR 15,500 crore, reflecting a strong position in the Indian fintech ecosystem. The stock price has experienced fluctuations, with a recent trading price around INR 560, up from a previous low of INR 430 over the past year.

Additionally, asset management firms and mutual funds like HDFC and ICICI are also key players in the ownership structure, holding significant stakes through various funds, contributing to the overall institutional ownership.

As the fintech sector continues to evolve, the ownership dynamics at PB Fintech Limited will be indicative of broader market trends and investor sentiment in the financial technology landscape in India.

PB Fintech Limited Mission Statement

PB Fintech Limited, the parent company of Policybazaar and Paisabazaar, articulates its mission to simplify the lives of consumers by providing them with easy access to financial services. The mission underscores the company's commitment to leveraging technology and innovation to enhance financial literacy and empower customers in making informed decisions.

A key aspect of their mission involves the promotion of transparency in the insurance and lending sectors, aiming to bridge the information gap faced by consumers. By offering a platform where users can compare various insurance policies and financial products, PB Fintech intends to demystify the financial decision-making process.

As of the latest update, PB Fintech has reported significant growth in user engagement and revenue, which reinforces its mission focus:

With a strong emphasis on technology, PB Fintech has strategically invested in artificial intelligence and data analytics to enhance its platform offerings. This investment aligns with its mission to improve customer experience and satisfaction.

Moreover, PB Fintech aims to reach an extensive audience by expanding its services beyond urban areas to include tier 2 and tier 3 cities. The company's commitment to financial inclusion is reflected in its user growth strategy, focusing on educating consumers about insurance and loans.

The mission statement also reflects a focus on building lasting partnerships with financial institutions to offer comprehensive solutions tailored to consumer needs. For instance, partnerships with over 50 insurance companies provide users with a variety of options, making it easier for them to find suitable products.

As of Q2 FY 2024, the company holds a significant market share in both the insurance and lending sectors:

In summary, PB Fintech Limited's mission statement is both a reflection of its core values and a roadmap for its future endeavors, supporting its ambitious goals while staying committed to transforming the financial services landscape in India.

How PB Fintech Limited Works

PB Fintech Limited, the parent company of Policybazaar and Paisabazaar, operates as a financial technology platform in India. It primarily offers insurance and lending solutions through its online portals. As of September 2023, the company has a market capitalization of approximately ₹7,000 crores.

The company generates revenue mainly through commissions and fees from the insurance products sold and the loan products facilitated on its platforms. In FY 2023, PB Fintech reported a revenue of ₹1,098 crores, reflecting a growth of 30% from the previous fiscal year.

In terms of net profit, PB Fintech achieved ₹120 crores in FY 2023, a significant increase compared to a loss of ₹88 crores in FY 2022. The EBITDA margin for FY 2023 stood at 10%.

PB Fintech's operational model includes:

• Online Insurance Aggregation: The Policybazaar platform allows users to compare various insurance products, including life, health, and vehicle insurance.
• Lending Solutions: Paisabazaar enables users to assess and apply for various loans, such as personal loans, credit cards, and other financial products.

The company's user engagement metrics are robust. By Q2 2023, PB Fintech had over 100 million registered users across its platforms, with an average monthly traffic of 15 million unique visitors on Policybazaar and 10 million on Paisabazaar.

Operationally, PB Fintech has focused on technology and data analytics to enhance user experience and streamline processes. The company employs over 2,500 professionals, including tech developers and financial analysts, to drive innovation in its service offerings.

Additionally, PB Fintech has established partnerships with over 300 insurance and financial institutions, leveraging these relationships to enhance its offerings and provide better options for consumers. The company has also invested in marketing and brand-building campaigns, which contributed to its strong growth trajectory in recent years.

The fintech landscape in India is evolving, and PB Fintech is well-positioned to capture market share. With the increasing penetration of digital financial services, the demand for online insurance and loan products is expected to grow, potentially benefiting PB Fintech's revenue streams in the coming years.

How PB Fintech Limited Makes Money

PB Fintech Limited, operating primarily under the brand Policybazaar, generates revenue through several key channels. The company mainly earns from online insurance brokerage, premium collection, and additional financial services. Understanding these streams provides insight into its business model and overall financial health.

Online Insurance Brokerage

As an insurance aggregator, PB Fintech earns a significant portion of its revenue from facilitating the purchase of insurance policies. The company showcases a variety of products from multiple insurers, allowing customers to compare and purchase plans online.

In the fiscal year 2023, PB Fintech's online insurance brokerage contributed approximately 75.0% of its total revenue, amounting to INR 1,500 Cr. This reflects a growth trajectory from the previous years, emphasizing the firm’s strong positioning within the insurance sector.

Premium Collection Fee

PB Fintech also earns income through premium collection fees when customers purchase insurance. This fee is a percentage of the insurance premium and can vary based on the product type and insurer.

• Health Insurance: Premium collection tends to range around 10%-15% of the total premium.
• Life Insurance: Typically, the collection fee is approximately 2%-10%.
• Motor Insurance: This ranges roughly between 5%-10%.

In FY 2023, the company reported an average premium collection fee percentage of 10%, which contributed significantly to its bottom line.

Financial Services

Additionally, PB Fintech has ventured into other financial services, including loans and investment products. The company earns revenue from these services through various channels, such as:

• Advisory Fees: These fees are charged for consultations related to financial products.
• Referral Fees: PB Fintech receives fees for referring clients to third-party financial institutions.
• Interest Income: The company may also earn interest income from loans disbursed through its platform.

In FY 2023, the financial services segment generated revenue of INR 500 Cr, making up approximately 25% of the total revenue.

Marketing and Partnerships

PB Fintech engages in strategic partnerships with insurance providers and financial institutions. These collaborations often lead to co-branded marketing efforts. The revenue from these partnerships is typically structured through:

• Revenue Sharing Models: PB Fintech receives a share of the premiums collected through its platform.
• Performance-based Bonuses: Additional incentives based on the volume of sales generated through their marketing efforts.

Conclusion

PB Fintech's multifaceted revenue streams enable it to capitalize on the growing demand for insurance and financial services in India. By combining technology with an extensive range of products, the company positions itself as a dominant player in the fintech landscape.