UK fund manager Bay Capital has come in as a pre-initial public offer (IPO) investor in PB Fintech Pvt.Ltd, the holding company of Policybazaar, which is set to go public through a ₹4,000 crore share sale, two people directly aware of the development said.
“Bay Capital has completed a secondary transaction, ahead of the insurance aggregator’s plans to launch an IPO within the next few months,” one of them said on condition of anonymity. “If Bay Capital chooses to be an anchor investor, it could invest over $100 million in Policybazaar.”
Gurugram-based Policybazaar, India’s largest online insurance comparison website, has attracted immense interest from a bunch of large investors before the company’s IPO.
The SoftBank-backed insurance aggregator’s other key investors include True North, Tencent, Tiger Global, Premji Invest, Temasek, Info Edge India Ltd and Ribbit Capital.
Policybazaar is India’s second fintech startup to get unicorn status, after Paytm, and will be the first company to be listed from the country’s financial aggregator space.
Several existing investors in Policybazaar want to monetize some of their stakes in the company, while some investors may look for a complete exit via the IPO. So, the IPO is likely to be a combination of fresh issuance and an offer for sale (OFS).
SoftBank and Singapore’s Temasek Holdings Pte each hold about 15% in Policybazaar, while Tencent and Tiger Global own about 10% and 8%, respectively.
Policybazaar became a unicorn in 2018 when it raised $200 million in a Series F round led by SoftBank. Paytm became a unicorn in 2017.
According to the Securities and Exchange Board of India, anchor investors can invest up to ₹250 crore in Policybazaar in the IPO.
Policybazaar may allocate up to 60% of the portion available for allocation to qualified institutional buyers to anchor investors a day before the IPO opening.
In an IPO, at least two and a maximum of 15 anchor investors are allowed to be allocated up to ₹250 crore worth of shares.
On 15 February, Mint reported that Policybazaar is launching a ₹4,000 crore IPO at a valuation of at least $3.5 billion. “Bay Capital is a long-term investor and we see them playing a key role as Policybazaar heads towards the public markets in the next 12-15 months. Bay Capital has built a portfolio straddling along with the growth opportunities in India in areas such as consumer, digital, finance, outsourcing and health,” said the second person cited above.
An email sent to Bay Capital did not elicit any response. A Policybazaar spokesperson declined to comment for the story.
This article was first published on livemint.com.