Should you pay a premium to add PB Fintech to your portfolio?

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Shares of PolicyBazaar’s parent firm PB Fintech made decent listing on the bourses on Monday. Shares of the fintech company opened for trading at a 17.35% premium over the issue price of Rs 980 per share. The stock opened at Rs 1,150 apiece on the NSE and the BSE. In late noon trades the stock made a high of Rs 1,249 per share on the BSE, and was currently trading at Rs 1,224 apiece, up around 25% to its issue price.

“PB Fintech got listed with a gain of 17% which was approximately in line with our expectations. The company is a leading Fintech firm that aims to enhance its visibility and awareness along with increasing its customer base which is expected to be beneficial for the company. The existing investors are advised to hold the stock with an stop loss of Rs 1,050 while the new investors can look for a dip. The company can perform much better over the long run,” said Aayush Agrawal, Research Analyst at Swastika Investmart.

Insurance partners

Policybazaar is a digital insurance marketplace, with FY20 market share of 93.4%, based on the number of policies sold through online insurance distribution platforms. It has partnered with 48 insurers, and 51.1 million consumers have registered on its platform. It has sold 20.7 million policies on its platform and has 10 million unique transacting customers.

“The company depend on cooperation with insurer and lending partners. Their business may be negatively affected if the business partners do not continue their relationship with them. Company listed at around market Cap/Sales of 54.63 times with a market cap of Rs 53,265 crore. Though the company has bright prospects going forward, its issue pricing discounts all near term positives. Long term investors should wait to enter in the stock as valuations are high for loss making company,” said Akhil Rathi, Vice President Advisory at Marwadi Shares and Finance.

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