PB Fintech: PB Fintech to consider returning capital to shareholders: Yashish Dahiya

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Policybazaar parent PB Fintech is looking to return a part of its capital to shareholders either through a share buyback or dividends, after having turned profitable in the third quarter, company chairman and cofounder Yashish Dahiya told ET in an interaction.
A formal decision in this regard, however, will be made only after discussions with the board and consent from shareholders, he added.

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“I would say the probability, about 85%, is that we may look to return the capital to shareholders through a buyback or dividends. And it will not be too far off in the future… and my gut feeling is that it will be buybacks, more than dividends,” Dahiya said.

“We expect our cash reserves to touch around Rs 7,500 crore in 2027,” he said.

The company may also deploy part of the surplus capital to find interesting opportunities for the business and to have a deeper control on its value chain to help customers have better experiences, Dahiya said.

Alok Bansal, cofounder and executive vice chairman at PB Fintech, said, “There are only three to four things that a company can do (with surplus capital). This includes deeper and more control over our value chain, look at adjacencies, third is to look at unrelated business lines for growth and fourth is geographical expansion. We may look at the first.”

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In the past the company’s management said that it wanted to deliver profits of Rs 1,000 crore by FY27. Maiden net profit

PB Fintech on Wednesday reported its first ever net profit of Rs 37.2 crore for the third quarter ended December. Following through on the guidance provided in the previous quarters, the company also reported profits of Rs 4.2 crore for the first nine months of FY24.

The firm’s revenue from operations grew 43% on year to Rs 871 crore in the third quarter. Its core online marketplaces Policybazaar and Paisabazaar reported a 39% increase in combined revenues at Rs 593 crore.

Dahiya said the company will look to apply for a payments aggregator licence with an aim to improve efficiencies around instant settlements to customers in case of cancellation of insurance policies.

Shares of PB Fintech crossed its IPO price and hit a 52-week high of Rs 1,045.30 before closing at Rs 1,002.40 on the NSE on Wednesday.

Upcoming competition

Over the last year, several analysts and research firms including Macquarie have warned against the upcoming competition that insurance aggregator Policybazaar would face from Insurance Regulatory and Development Authority of India’s upcoming Bima Sugam platform.

Bansal, however, said, “We will look at the possibility that it (Bima Sugam platform) will be beneficial to us and will be a great outcome for the industry in general. It will also improve people’s confidence in claims in the health insurance industry.”

Government-backed open ecommerce platform Open Network for Digital Commerce (ONDC) is also looking to expand its services to offer credit and embedded insurance.

Dahiya said Policybazaar “will look to be there on every platform which reaches the consumer”.

“But if you ask us, 10 years from now, insurance may still require a physical leg. And I think (even with digital penetration), saving products (around insurance) cannot be sold without assistance,” he said. “We have people in 360 cities and integrations with several hospitals and that is deep work that we have put in.”

With the Reserve Bank of India (RBI) increasing risk weightages on unsecured consumer credit in the country, Dahiya told analysts on Tuesday that he expects PB Fintech’s credit marketplace Paisabazaar to grow at 30% instead of 40% previously.

“We think that it is a quarter story. There are no quality issues we see in our business. And our assessment is that it is an industry-related matter,” he said. “We already have a healthy pipeline of 5-6 new suppliers (lenders) coming on board and it takes time to integrate and build with them.”

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