Insurance aggregator and fintech company Policybazaar is looking at an IPO by 2021, the company’s co-founder Yashish Dahiya told Bloomberg. The company is looking at a valuation of $3.5 billion, and if it does go public, it will be first among India’s big startups to do so.
According to Dahiya, the company has plans to get about $250 mn in financing with a valuation of over $2 billion before it goes for the IPO. He also told Bloomberg that they are also selecting lead underwriters for the IPO currently. “We have global interest and will raise in the coming weeks,” he said.
Policybazaar’s backers include Softbank, Tencent, Temasek and Tiger Global, among others.
Last year, the Economic Times reported that a few of India’s top startups appealed to the Securities and Exchange Board of India to revise rules regarding the listing of startups of stock exchanges. In May 2020, the Centre allowed companies to list overseas directly, but clarity is still awaited.
Dahiya told Bloomberg that he wants to list in Mumbai, but is also looking at a dual listing if the rules change and allow it.
Dahiya also told PTI that he plans to raise $150 mn as buffer capital in Q3 of FY21.
"We might raise some capital as a buffer. In the future you never know what will happen. This year COVID happened. What if something else happens in the future? We may raise about USD 150 million, but that is more for safety than for any plan. It may happen in the Q3," he said.
Policybazaar also expects to return to profitability this fiscal year on the back of surge in demand for insurance products amid the COVID-19 pandemic.
Growth over the last year is between 70% and 100% depending on the insurance product, he said, adding, "This year we should be profitable. We were profitable in FY18, while FY19 and FY20 we were not quite profitable. So this (growth in business) will help us to become profitable from this year onwards."
He further said the company will look to consolidate its operations, invest in customer service and work towards capital efficiency as it looks to swing back into profitability this fiscal year.
Despite booking a loss, the company's revenue jumped three-fold, while it doubled both market share and valuation at the end of FY20, he added.
During 2020-21, Dahiya said the company should log revenue of Rs 1,100 crore and post a marginal profit.
On the insurance premium side, he said the current fiscal year will close with Rs 6,000 crore as against Rs 4,000 crore in FY20.
This comes as the health insurance sector in the country has grown due to the pandemic, and is reportedly expected to grow faster. Due to COVID-19, health insurance overtook motor insurance and became the largest ever portfolio in general insurance in April and May.