Tencent Set to Sell 2.1% Stake in PolicyBazaar for Rs. 1,610 Crore

PB Fintech Ltd, better known as PolicyBazaar, is India’s go-to online platform for insurance and lending products, operating through its popular brands—PolicyBazaar and PaisaBazaar. These platforms make it easy for users to access a wide range of insurance, credit, and financial products.

In a major move, Chinese tech giant Tencent is gearing up to sell a 2.1% stake in PB Fintech through a block deal, estimated at Rs.1,610 crore. The floor price is likely to be Rs.1,660.2 per share, according to the reports, which is about a 4.5% discount compared to the last closing price of Rs.1,737.10 yesterday.

What Tencent’s Stake Sale Means

As of June 30, 2024, Tencent held a 4.6% stake in PB Fintech, which translates to about 1.94 crore shares through Tencent Cloud Europe B.V. This planned sale of 9.7 million shares will nearly halve Tencent’s stake in the company. The deal will include a 60-day lock-in period for the seller.

PolicyBazaar’s Growth Story

Over the past year, PB Fintech has been on a roll, with its stock delivering a whopping 129% return—far outpacing the Nifty index, which gained 30% in the same period. For 2024 so far, the company’s stock has jumped 116%, while Nifty’s year-to-date gain stands at 15%.

In Q1FY25, PB Fintech reported a net profit of Rs.60 crore, a strong comeback from the Rs.12 crore loss in the same quarter last year. Revenue from operations grew by 52% year-on-year, reaching Rs.1,010 crore. The company’s adjusted EBITDA was Rs.49 crore, with a margin of 5%, up from 3% a year earlier. The total insurance premium for the quarter was Rs.4,871 crore, marking a 62% year-on-year growth.

Conclusion: Wrapping It Up, with a 93% market share among online aggregators and over 44.3 million insurance policies issued to date, PB Fintech has positioned itself well. Tencent’s decision to offload a portion of its stake might be seen as a well thought move, but it does little to overshadow PB Fintech’s fundamentals and market position.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.