PolicyBazaar in talks with bankers for a $1.5 billion IPO valuation

More than a dozen investment banks, from Wall Street biggies to domestic heavyweights, made a pitch earlier this week as the parent of online insurance aggregator PolicyBazaar and PaisaBazaar, a lending platform, steps up work on its initial public offer, which could value the company at over $1.5 billion, people close to the development said.
 
The portal’s holding entity, EtechAces Marketing and Consulting, is likely to be the first financial technology listing on the Indian exchanges, riding the bullish investor sentiments around the digital financial sector.
 
PolicyBazaar clocked Rs 1,800 crore in premium this year and expects to ring in Rs 35 crore in profits by 2018, aiding its prospects to successfully go public.
 
Backed by Wellington Management, one of the world’s largest asset management companies, Temasek, Tiger Global, and PremjiInvest, among others, the company was valued at $500 million when it raised capital recently.
 
“The company met around 15 investment banks, each of which was given a short time to pitch. There is a lot of interest in the IPO which should happen by next year,” one of the bankers said on the condition of anonymity.
 
PolicyBazaar’s CEO and co-founder Yashish Dahiya said they have been meeting bankers for the last one year but a price for the listing was not decided. “We met investment bankers a few days ago as well, but we are yet to decide on an IPO or its timing,” he said. Till now, the company has racked up $180 million in risk capital.
 
The online financial services firm, which expects to register Rs 400 crore in revenue, is looking to diversify PaisaBazaar from being a lending platform which facilitates personal loans, credit cards, and loans against property, to selling mutual funds and healthcare services like doctor appointments on its site.
 
PaisaBazaar helped disburse monthly Rs 350 crore in loans with a majority of it being unstructured and personal. The company will expand into international markets, beginning with the Middle East, as it prepares to go public.
 
While PolicyBazaar competes with other online insurance aggregators like Coverfox, PaisaBazaar is up against a slew of startups in the lending space, all of which are attempting to corner the potentially large unstructured credit market in India. In the next few years, PaisaBazaar expects to take over PolicyBazaar in terms of revenue.
 
Amid the billions of dollars that have been ploughed into Indian startups, a bulk of which flowed in over past three years, not much has come in the way of returns for investors other than through secondary sale of their shares to the likes of SoftBank, the most influential tech investor globally.
 
SoftBank has bought $1 billion worth of secondary shares in Flipkart and is in talks to pick up additional stake in cab aggregator Ola, paving the way for a partial liquidity for Tiger Global, the New York-based investment fund that had emerged as the most prolific backer of Indian consumer internet startups over the past few years.
 
But the dearth of IPOs among new-age internet firms, founded in the past 10 years, has led to an increased appetite for PolicyBazaar’s offering, people in the industry said.
 
Online match-making site BharatMatrimony was the most recent IPO in the domestic internet sector with others like mobile gaming player Nazara Technologies and logistics technology firm Delhivery also preparing to go public in 2018. MakeMyTrip, Info Edge, and Just Dial have been the largest internet IPOs out of India. There have been earlier media reports indicating PolicyBazaar’s IPO plans.
Shoot