Motilal Oswal Financial Services

PB Fintech - Leading the digital insurance and credit marketplace



PB Fintech

commenced operations in FY08 initially as an insurance web aggregator. Subsequently, it entered the credit market to

provide convenient access to insurance, credit, and other financial products. In addition to creating a distribution channel, it also

provides online marketing, consulting, and support services for the Financial Services industry, and follows an asset-light capital

strategy without undertaking any insurance or credit risk on its books.



The company has been successful in building India’s largest online marketplace

for insurance and lending products, leveraging the

power of technology, data, and innovation. The company offers online research-based purchases of insurance and lending products. It

further facilitates partners to innovate and design customized products for consumers by leveraging extensive data insights.



Policybazaar – the flagship platform –

caters to consumer demand for higher awareness, choice, and transparency towards the online

sale of insurance products. It has thus evolved as

India’s largest digital insurance marketplace, with market share of 93.4% (based on

the number of policies sold);

it constituted 65.3% of the digital insurance sales in India by volume as of FY20. It has partnered with ~51

insurers, and ~48m consumers have registered on its platform.



The company has sold ~19.2m policies on its platform and has ~9.6m unique transacting customers. It reported 126.5m annual

visits on its website in FY21.



In Jun’21, the company received the Brokers License, which would allow it to target offline and corporate businesses as well.



Paisabazaar is the largest digital consumer credit marketplace,

with

market share of 51.4% on the basis of disbursals.

It began its

operations in FY14 with the goal to transform personal credit access by offering ease, convenience, and transparency in selecting a

variety of consumer credit products. It is widely used to access credit scores, with ~21.5m consumers as of Mar’21. It has partnered

with ~54 lenders across banks, NBFCs, and fintechs offering a wide choice of consumer credit products, such as personal loans,

business loans, credit cards, home loans, and LAP.

October 2021

Company Structure

PB Fintech

(To be listed)

Key operating

Subsidiaries

Policybazaar

STAKE

100%

Paisabazaar

100%

PB Fintech (Marketing

and Consulting)

100%

Others

100%

October 2021

Key milestones

2008

2010

2008

Info Edge invests USD4m

Incorporation

Commences health

insurance related activities

Registers Paisabazaar as investment

adviser with SEBI

2012

2015

Builds in-house actuarial

analytics team in respect of retail

customer sales

Registers one of the subsidiaries as insurance web aggregator

with IRDAI

2018

2021

2018

Achieves USD1b valuation mark

with Series F investment

Commences

operations in UAE

through PFFL

Registers Policybazaar

as insurance broker

with IRDAI

October 2021

Business model – provides full bouquet of insurance and credit products

Policybazaar

Primarily generates revenues from

(i)

Insurance commissions

– commissions

earned on the solicitation of insurance

products/policies based on the

percentage of premiums originated by

them

Paisebazaar

Primarily generates revenues from

(i)

Commissions on online aggregation

–

commissions earned from the sale of

financial products based on a

percentage of loan disbursals or a

fixed fee in the case of credit cards

PB Fintech

Primarily generates revenues from

(i)

Online marketing and

consulting services

– provided

to insurer and lending partner

for types of services provided

(ii) Outsourcing services

– services

provided to insurers in relation to

activities outsourced by them, such as

telemarketing, sales and post-sales

services, account management,

premium collection, etc.

(iii) Rewards

– earned from insurance

partners, generally based on volume

and quality

(ii) Online marketing and consulting

services

– includes bulk emailers,

advertisement banners on its

website, and credit score advisory

services

(iii) Sale of leads

– Revenue from the sale

of lead information of potential

customers to banks, etc.

(ii) IT support services

– services

related to IT applications and

solutions, such as enhancing the

tech capability, and digitizing

and enhancing the platforms

October 2021

Life Insurance: Share of web aggregators on the rise

Market share of web aggregators at 0.3% of total private NBP

Web aggregators - Total Private NBP

Web aggregators - Total NBP

0.3%

0.2%

0.1%

0.0%

FY17

0.1%

FY20

Source: MOFSL, Company

FY17

0.3%

Market share of web aggregators at 0.5% of individual private NBP

Web aggregators - Ind Private NBP

Web aggregators - Ind Total NBP

0.5%

0.2%

0.1%

FY18

0.2%

0.0%

FY18

FY19

FY20

Source: MOFSL, Company

Market share of brokers stable at ~3.5% for past few years

Brokers - Total Private NBP

3.5%

3.6%

Brokers - Total NBP

3.5%

Broker’s market share at 3.4% of individual private NBP

Brokers - Ind Private NBP

3.7%

3.0%

1.6%

1.3%

2.9%

1.3%

3.0%

1.4%

Brokers - Ind Total NBP

3.4%

1.7%

1.0%

1.1%

1.2%

1.1%

FY16

FY17

FY18

FY19

FY20

FY16

FY17

FY18

FY19

FY20

Source: MOFSL, Company

October 2021

Non-Life Insurance: Share of web aggregators and brokers remains healthy

Brokers’ market share healthy at ~23%

Brokers

Market share of web aggregators increases to 1% over FY20

Web aggregators

27.8%

24.4%

FY16

FY17

25.2%

22.3%

FY18

FY19

23.3%

FY20

0.1%

FY16

1.0%

0.2%

FY17

0.5%

FY18

0.7%

FY19

FY20

Source: MOFSL, Company RHP



The market share of digital insurance policies has been growing on the back of rapid growth in web aggregators. As

per the IRDAI, the number of web aggregator platforms had increased to over 21 up to Jun’21 from 11 in 2013.



Digital Life / Health Insurance has expanded ~3x/1.3x the industry’s growth rate. The share of web aggregators

within digital insurance has been constantly increasing and now originates 30–40% of the total digital insurance.



Online first and direct-to-customer insurers such as

Digit and Acko have scaled to 3.5%/~2% market share in

Motor/Total General insurance premiums.

These insurers have focused on high levels of digitization (in underwriting

as well as claims) to achieve faster breakeven, with

Digit already reducing its combined ratio to 117% within three

years of operations.



Growth in protection products, such as Health and Term Life, is being driven by digital distribution.

October 2021

Significant underpenetration provides structural growth opportunity



Premiums via the online channel stand much

lower at 1% for India v/s 5.5% for China and

13.3% for the US.

Penetration levels remain the lowest for India across most segments

2020

Gross National Savings as % of GDP

People with trading account as % of population

Life insurance penetration (Sum Assured as % of GDP)

Non-life insurance penetration (Premium as % of GDP)

As % of population with no insurance (Non Life)

Premium via Online Channel (USD b)

% of total premium

India

29.4%

3.0%

24.6%

1.0%

72.3%

1.0

1.0%

17.8%

36.3%

265.0%

6.5%

10.9%

208.0

13.3%

China

45.7%

11.8%

95.4%

2.1%

35.0%

35.5

5.5%



The rise in urban population and rapid digital

adoption, aided by a rise in smartphone users,

would drive incremental growth.



For Non-Life Insurance, GWP as % of GDP for

India stands at ~1% v/s the global avg of 2.8%,

thereby providing significant growth

opportunities.



Improving financial literacy – as 72% of the

population still does not have insurance –

would drive growth, providing a long-term

structural opportunity.

Digital penetration remains far lower in India…

2020

Internet Penetration

Smartphone Penetration

Payment Wallets Penetration

Online Shopping Penetration

India

45%

39%

14%

90%

82%

28%

77%

China

65%

63%

59%

54%

…expect it to improve significantly over the next decade

Penetration of India

Internet Penetration

Smartphone Penetration

Payment Wallets Penetration

Online Shopping Penetration

2020

45%

39%

14%

2025

63%

57%

23%

22%

2030

75%

72%

38%

36%

October 2021

Industry to grow multi-fold over the next decade



Sum assured as a percentage of GDP for India is among the lowest at 25%, while the protection gap is among the highest at

83%.



Healthcare expenditure per person is significantly lower at 5.5k, with ~63% of health expenses being met out of pocket. Only

10% is financed by health insurance.



The overall Insurance industry is expected to see an ~18% CAGR over FY20–30, within which Life Insurance is expected to grow

at ~19% and Non-Life Insurance at ~14%.



Within Non-Life, Health Insurance is expected to see a ~15% CAGR and Motor a ~14% CAGR.



As per a CRISIL report, total GWP for non-life insurers is expected to grow to USD7t by 2025.

Insurance industry to grow multifold over next decade, with Life/Non-Life to see 19%/14% CAGR (INRt)

Life

Non Life

7.1

Health

Motor

Others

2.5

2.6

2.0

3.3

1.9

5.7

2020

11.5

2025P

31.9

0.6

0.7

0.6

2030P

Source: DRHP

2020

2030P

Source: DRHP

October 2021

Significant underpenetration provides long-term growth opportunity

Sum assured as % of GDP stands among lowest at 25%...

Sum Assured as % of GDP

…while protection gap stands highest at 83%

Protection Gap (%)

273%

Singapore

265%

USA

252%

Japan

142%

Malaysia

131%

South

Korea

113%

Thailand

95%

China

25%

India

83%

India

71%

Thailand

70%

China

61%

Japan

55%

54%

48%

USA

41%

Hong

Kong

Source: DRHP

Singapore Australia

Source: DRHP

Healthcare expenditure per person significantly lower at 5.5k…

Health Exp per capital (INRk)

…with 63% of health expenses being met out of pocket

Out of pockedt health spends (%)

83.3

USA

63.6

Brasil

37.6

China

32.0

20.7

11.4

8.4

5.5

India

63%

India

35%

Indonesia

28%

China

17%

11%

USA

Source: DRHP,

Malaysia Thailand Vietnam Indonesia

Source: DRHP

October 2021

Industry to grow multi-fold over the next decade



The penetration of consumer loans stands much lower at

16.7% v/s 80% in the US and 56% in China. Furthermore,

digital consumer lending disbursals form 22% of the total

v/s 56% in the US.

Penetration level remains lowest for India across most segments

2020

Active credit cards as % of population

Active debit cards as % of population

People with no credit score as % of population

Consumer loans outstanding as % of GDP

Credit card lending as % of GDP

Housing credit outstanding as % of GDP

Retail mutual fund (AUM as % of GDP)

Digital Consumer Lending Market Disbursals (USD b)

% of total consumer lending Disbursals

India

4.5%

65.1%

78.3%

16.7%

0.5%

10.4%

8.1%

21.8%

China

137.3% 54.1%

79.8% 512.7%

41.0% 29.1%

79.2% 55.6%

14.7% 51.9%

57.8% 41.2%

70.2% 34.9%

3,358

2,270

55.9% 25.6%

Source: DRHP



Improving financial literacy and rising Internet penetration

would support growth in online credit platforms.



Consumer credit loans are expected to grow at a steady

state over FY20–30. This would be led by credit cards and

personal loans – likely to see a ~19% and ~12% CAGR,

respectively, over this period.

Consumer loans to see robust traction over decade (INRt)

Personal Loans

Home Loans

Credit Card Loans

44.1

29.5

20.4

5.1

1.4

2020

5.8

8.9

3.3

2025P

7.3

15.9

Others

Disbursals to grow multi-fold over next decade (INRt)

Personal Loans

Credit Card Loans

13.3

8.0

3.5

1.0

6.8

8.0 10.0

3.6

2030P

2020

2025P

2030P

October 2021

PB Fintech: Revenue mix healthy; profitability showing improvement



It saw a total revenue CAGR of ~34% over FY19–21, led by insurance web aggregator services, which grew ~40% over FY19–21.



Insurance web aggregator services thus form 68.5% of total revenues.

Overall,

commission income (both Policybazaar and

Paisabazaar) constitutes ~36% of total revenues, while fees from outsourcing/consulting form 52%.



PAT mix – FY21:

PB Fintech reported loss of INR1.5b in FY21. Within this, Policybazaar reported loss of INR1.76b, while Paisabazaar

posted profit of INR136m (after reporting losses in previous years). The

contribution margin

thus

expanded sharply to 39.8% in FY21.

Key Stats (INR m)

Revenue from Operations

- Policybazaar

- Paisabazaar

- Other Services

PAT

- Policybazaar

- Paisabazaar

- Others

Contribution Profit

Contribution profit margin (%)

Adjusted EBITDA

Adjusted EBITDA Margin (%)

FY19

4,922

3,103

1,547

273

(3,468)

(2,131)

(971)

(366)

422

8.6

(2,855)

(58.0)

FY20

7,713

5,159

2,262

292

(3,040)

(2,182)

(1,012)

153

1,053

13.7

(3,032)

(39.3)

FY21

8,867

6,069

1,883

914

(1,502)

(1,758)

136

120

3,530

39.8

(615)

(6.9)

October 2021

PB Fintech: Healthy mix of commissions and fee income

Operating revenue sees 34% CAGR over FY19-21

Revenue from operations (INRm)

57%

% Growth (YoY)

Insurance business comprises ~69% of total operating revenues

Insurance web aggregator services

37.0%

33.1%

Other Services

31.5%

15%

4,922

FY19

7,713

FY20

8,867

FY21

Source: MOFSL, Company

63.0%

66.9%

68.5%

FY19

FY20

FY21

Source: MOFSL, Company

Revenue mix: Commission income declines over FY21 on

moderation in credit disbursals

Commission

15.9%

39.8%

Outsourcing services

Rewards/Others

12.0%

52.2%

Contribution margin expands sharply to ~40% in FY21

Contribution Profit (INRm)

Contribution Margins (%)

39.8%

13.1%

40.5%

8.6%

13.7%

44.4%

FY19

46.4%

FY20

35.7%

422

FY21

Source: MOFSL, Company

FY19

1,053

FY20

3,530

FY21

Source: MOFSL, Company

October 2021

PB Fintech: Cost ratio moderates, driving improvement in core profitability

Opex sees modest 13% CAGR over FY19-21

Total Opex (INRm)

162%

133%

114%

51%

34%

8,588

FY19

11,385

FY20

10,878

FY21

Source: MOFSL, Company

C/I Ratio (%)

Staff expenses, marketing costs form the bulk of opex

3% 3%

Staff Cost

Advertisement and

promotion

Network and Internet

charges

Depreciation

Payment gateway

charges

Other expenses

Marketing costs see modest 3% CAGR over FY19-21

Adv & promotion costs (INRm)

29%

3,678

% Growth (YoY)

Opex & marketing costs as % of revenue see constant

decline; moderate to 123%/42% v/s 175%/70% in FY19

Opex as % of revenue

174.5%

Adv & Promotion cost as % of revenue

147.6%

122.7%

70.3%

57.7%

41.5%

3,459

FY19

4,452

FY20

-17%

FY21

Source: MOFSL, Company

FY19

FY20

FY21

Source: MOFSL, Company

October 2021

PB Fintech: Contribution profit expands sharply



The contribution margin is a key metric to evaluate operating performance

as it factors in the direct costs of

operating the businesses. It is calculated as revenue from operations less direct expenses pertaining to employee

benefits and advertisement and promotional costs.



The contribution margin expanded sharply to 39.8% v/s 8.6% in FY19.

INR m

Revenue from operations

Less:

(-) Employee benefit expenses

(-) Advertisement and promotion cost

Contribution profit

2,431

2,069

422

3,479

3,181

1,053

3,091

2,246

3,625

FY19

4,922

FY20

7,713

FY21

8,867

Contribution Margin (%)

8.6%

13.7%

39.8%

October 2021

PB Fintech: Financial statements, DuPont, and key business metrics

Income Statement (Y/E March) – INR m

Insurance web aggregator services

Growth (%)

Other Services

Growth (%)

Revenue from operations

Growth (%)

Other Income

Total Income

Growth (%)

Operating Expenses

EBITDA

Contribution Profit

PBT

Tax

PAT

DuPont (As % revenue)

Insurance web aggregator services

Other Services

Revenue from operations

Other Income

Total Income

Operating Expenses

EBITDA

PBT

Tax

PAT

FY19

3,103

1,819

4,922

366

5,288

8,588

-3,361

422

-3,374

-3,468

FY19

63.0

37.0

100.0

7.4

107.4

174.5

-68.3

-68.5

1.9

-70.5

FY20

5,159

66.3

2,554

40.4

7,713

56.7

843

8,556

61.8

11,385

-3,199

1,053

-2,948

-3,040

FY20

66.9

33.1

100.0

10.9

110.9

147.6

-41.5

-38.2

1.2

-39.4

FY21

6,069

17.6

2,797

9.5

8,867

15.0

708

9,574

11.9

10,878

-1,598

3,530

-1,419

-1,502

FY21

68.5

31.5

100.0

8.0

108.0

122.7

-18.0

-16.0

0.9

-16.9

Balance Sheet (Y/E March) – INR m

Share Capital

Reserves & Surplus

Net Worth

Lease liabilities

Trade payables

Other Liabilities & Prov.

Total Liabilities

Cash & Bank Balances

Investments

Trade Receivables

Fixed Assets

Current Tax Assets

Other Assets

Total Assets

Business Metrics (Y/E March) – INR m

New business premium

Renewal premium

Total Premium

Growth (%)

New business premium Mix

Renewal premium Mix

No of policies sold (Nos. in Mn)

Disbursals (INRm)

Total Premium per advisor (INRm)

New Business Premium per advisor (INRm)

Cost/Income (%)

EBITDA Margin (%)

Adjusted EBITDA Margin (%)

Contribution Margins (%)

FY19

4,894

4,903

887

1,110

614

7,514

2,674

1,252

1,313

1,189

817

269

7,514

FY19

17,187

5,967

23,154

74.2

25.8

3.0

51,015

6.3

4.6

174.5

-68.3

-58.0

8.6

FY20

12,647

12,658

1,084

1,179

838

15,760

11,056

1,788

1,473

1,117

305

15,760

FY20

26,404

11,182

37,586

62.3

70.2

29.8

5.9

65,496

8.5

6.0

147.6

-41.5

-39.3

13.7

FY21

19,905

19,917

1,087

1,019

1,284

23,307

18,102

1,378

1,729

1,248

550

302

23,307

FY21

27,429

19,584

47,013

25.1

58.3

41.7

7.2

29,168

14.1

8.2

122.7

-18.0

-6.9

39.8

October 2021

Investment arguments and growth drivers



Strong brand recall; healthy mix of repeat customers:

PB Fintech maintains dominant market share and a strong brand recall

among the customers. As a result, it has become the preferred destination for comparing/exploring financial products. This has

enabled it to acquire a large customer base and superior product offerings enabled it to attract repeat business from existing

customers.



Low penetration provides long-term structural growth opportunity:

The sum assured as % of GDP remains far lower in India at

25% for Life Insurance, with a protection gap of 83%. Non-Life Insurance penetration also remains low at ~1% v/s the global

average of 2.8%. Within consumer loans, penetration stands at 16.7% v/s 80% in the US and 56% in China. Furthermore,

premiums via the online channel stand much lower at 1% for India v/s 5.5% in China and 13.3% in the US. We believe that lower

penetration, along with the adoption of digital channels, would be the key growth driver over the medium term.



Rising awareness about insurance products:

We believe COVID-19 has created an awareness among consumers about the

importance and need for having insurance. Thus, increasing consumer demand/awareness for insurance products, particularly

term and health, which are easier to sell, would likely support the growth momentum over the medium term.



COVID-19 accelerates adoption of digital channels:

India’s active

Internet user base is expected to increase to ~900m in FY26

from 400–450m in FY21,

while Internet/smartphone penetration is likely to increase to 75%/72% by FY30 (v/s 45%/39% in

FY21). COVID-19 has further accelerated the adoption of the digital channel, which augurs well for online marketplace leaders

such as PB Fintech.



Insurance Brokers License to propel growth:

Policybazaar acquired the Insurance Brokers License in Jun’21, which would aid in

providing in-person customer engagement and services through the physical offices. It would also look to garner group

businesses to develop relationships with corporates/SMEs. The company plans to open up ~200 physical outlets by FY24

(currently 15), which would aid in expanding the sources of premium income.

October 2021

SWOT analysis – PB Fintech

STRENGTHS



Leading player in online insurance distribution

Developed

itself as provider of wide

range of insurance and consumer credit products

Customer-friendly interface to compare products across insurers enables selection of best-suited products

Strong brand recall in customers

Approval of Brokers License would enable the undertaking of group/corporate businesses

WEAKNESSES



Slow traction in selling traditional PAR and Non-PAR policies as this involves a higher understanding of the

product and discussions with the customer



Dependence on tie-ups with partners; could negotiate on commission rates / fees charged

OPPORTUNITIES



Increasing Internet user base and changing consumer preferences towards digital channel



Significantly underpenetrated market provides long-term growth opportunities



COVID-19 has increased awareness for buying insurance

THREATS



Rising competition from other digital players / fintechs, particularly in non-life insurance and consumer

credit



Many insurance companies are focusing on scaling their online digital channels, which poses a risk



Continuity of partnerships remains a key risk as few partners recently discontinued selling their products



Any adverse regulatory changes could pose a major threat to the business

October 2021

IPO details and utilization of funds

About the offer



The total offer stands at INR60.2b, with a fresh issue of INR37.5b and

offer for sale of INR22.7b.

List of Shareholders

Makesense Technologies Limited

SVF Python II (Cayman) Limited

Tencent Cloud Europe B.V.

SVF India Holdings (Cayman) Limited

Claymore Investment (Mauritius) Pte Ltd

Etechaces Employees Stock Option Plan Trust

Tiger Global Eight Holdings

Diphda Internet Services Limited

Mr. Yashish Dahiya

PI Opportunities Fund – II

Internet Fund III Pte Limited

Falcon Q LP

Steadview Capital Mauritius Limited

True North Fund VI LLP

Startup Investments (Holding) Limited

Ithan Creek MB

Inventus Capital Partners Fund II, Limited

Mr. Alok Bansal

ABG Capital

Alpha Wave Incubation LP

% Share

14.56

9.45

9.16

6.31

6.26

5.48

4.63

4.59

4.27

3.78

3.14

2.82

2.39

2.3

2.11

1.83

1.57

1.45

1.07

1.05



Among the selling shareholders, Softbank, under the name of SVF Python

II (Cayman) Limited, is offering INR18.8b, while the founder and their

families are offering INR3.9b.

Utilization of proceeds



The company plans to use INR15b to meet the marketing expenditure for

enhancing brand visibility and awareness.



The company plans to undertake offline expansion and open 200 centers,

for which it plans to use INR3.8b.



It further plans to use INR6b to fund strategic investments and

acquisitions. It is also planning overseas expansion (Middle East), for

which it plans to use another INR3.8b.



The balance amount would be used for general corporate purposes.

October 2021

October 2021

Policybazaar

October 2021

Policybazaar: Largest insurance web aggregator; Brokers License to propel growth



India’s largest digital insurance marketplace:

Policybazaar is India’s largest digital insurance

marketplace, with dominant market share of 93.4% (basis policies sold); it constituted 65.3% of

the total digital insurance sales in India by volume as of FY20. In Jun’21, the company received

the Insurance Brokers License, which would allow it to provide in-person customer engagement

and undertake group/corporate business, in addition to the online business.

Key metrics

Details

Registered customer base

Unique customer base

Total Policies Sold

Annual visits

Market Share (Digital players)

Market share (Digital Sales)

Self origination

Commission Rate

Sum Assured

FY21

Premium Generated

New Business Premium

No of policies sold

Revenue

PBT

Net Profit

INR47b

Key Stats

~48m

~9.6m

~19.2m

126.5m

93.4%



Strong partner tie-ups and Brokers License to further propel growth:

Policybazaar has

partnered with ~51 insurers offering over 340 term, health, motor, home, and travel insurance

products on its platform.

65.4%

83%

5.5%

INR7t



Superior acquisition capabilities and strong customer base:

As of Mar’21, Policybazaar had

~48m consumers registered on its platform. The company has sold ~19.2m policies on its

platform and has ~9.6m unique transacting customers. In FY21, the company reported 126.5m

annual visits on its website. Furthermore, 83% of the premiums sourced in FY21 were through

consumers who visited the Policybazaar’s platform directly or via direct online brand search.



Digital capabilities and high renewal provide superior unit economics:

In FY21, ~3.7m policies,

representing 80.4% of the new policies, were sold with minimal human assistance.

Furthermore, the company significantly benefits from repeat purchases in the Health Insurance

and Motor Insurance segments. This provides the ability to write incremental business with

minimum additional spends, resulting in superior unit economics.

INR27.4b

7.2m

INR6.07b

Loss of

INR1.76b

Loss of

INR1.76b

October 2021

Life Insurance: Share of web aggregators increasing; Broker share stable

Market share of web aggregators at 0.3% of total private NBP

Web aggregators - Total Private NBP

Web aggregators - Total NBP

0.3%

0.2%

0.1%

0.0%

FY17

0.1%

FY20

Source: MOFSL, Company

FY17

0.3%

Market share of web aggregators at 0.5% of individual private NBP

Web aggregators - Ind Private NBP

Web aggregators - Ind Total NBP

0.5%

0.2%

0.1%

FY18

0.2%

0.0%

FY18

FY19

FY20

Source: MOFSL, Company

Market share of brokers stable at ~3.5% for past few years

Brokers - Total Private NBP

3.5%

3.6%

Brokers - Total NBP

3.5%

Brokers’ market share at 3.4% of individual private NBP

Brokers - Ind Private NBP

3.7%

3.0%

1.6%

1.3%

2.9%

1.3%

3.0%

1.4%

Brokers - Ind Total NBP

3.4%

1.7%

1.0%

1.1%

1.2%

1.1%

FY16

FY17

FY18

FY19

FY20

Source: MOFSL, Company

FY16

FY17

FY18

FY19

FY20

Source: MOFSL, Company

October 2021

Non-Life Insurance: Share of web aggregators/brokers healthy; steady repeat business across key products

Brokers’ market share healthy at ~23%

Brokers

Share of web aggregators increases to 1% over FY20

Web aggregators

27.8%

24.4%

FY16

FY17

25.2%

22.3%

FY18

FY19

1.0%

23.3%

0.1%

FY20

FY16

Source: MOFSL, Company RHP

0.2%

FY17

0.5%

FY18

0.7%

FY19

FY20

Source: MOFSL, Company RHP

Health insurance premium by cohorts – 5.9x over FY14

Motor insurance premium by cohorts – 3.4x over FY14

Source: MOFSL, Company RHP

October 2021

Policybazaar: Healthy mix of commissions and fee income

Insurance business sees 40% revenue CAGR over FY19-21

Revenue from operations (INRm)

66%

% Growth (YoY)

Outsourcing services contribute 49%, while commission

income forms 43% of revenues

Commission

8.6%

48.9%

Outsourcing services

8.9%

49.8%

Rewards/Others

8.0%

49.3%

18%

3,103

FY19

5,159

FY20

6,069

FY21

Source: MOFSL, Company

42.4%

FY19

41.4%

FY20

42.7%

FY21

Source: MOFSL, NSE

40% CAGR in commission income over FY19-21

Insurance Commission (INRm)

62%

40% revenue CAGR from outsourcing services

Outsourcing services (INRm)

69%

% Growth (YoY)

21%

1,317

FY19

2,134

FY20

2,591

FY21

Source: MOFSL, Company

1,518

FY19

2,568

FY20

17%

2,994

FY21

Source: MOFSL, Company

October 2021

Policybazaar: Strong traction in NBP; no of policies sold up 2.4x over FY19-21

New Business Premium CAGR at 26% over FY19-21

New business premium (INRm)

54%

% Growth (YoY)

Renewal Premium CAGR robust at 81% over FY19-21

Renewal premium (INRm)

87%

19,584

% Growth (YoY)

27,429

17,187

FY19

26,404

FY20

5,967

FY21

Source: MOFSL, Company

FY19

75%

11,182

FY20

FY21

Source: MOFSL, Company

Mix of NBP moderates to 58%, impacted by COVID-19

New business premium

25.8%

29.8%

Renewal premium

Number of policies sold up 2.4x to 7.2m over FY19-21

No of policies sold (Nos in Mn)

% Growth (YoY)

41.7%

97%

7.2

74.2%

70.2%

58.3%

3.0

FY19

22%

5.9

FY20

FY21

Source: MOFSL, Company

FY19

FY20

FY21

Source: MOFSL, Company

October 2021

Policybazaar: Cost ratios showing gradual improvement

Opex CAGR at 23% over FY19-21

Total Opex (INRm)

168%

140%

127%

C/I Ratio (%)

4% 6%

41%

Staff expenses, marketing costs form the bulk of opex

Staff Cost

Advertisement and

promotion

Network and Internet

charges

Payment gateway

charges

Depreciation

Other expenses

Source: MOFSL, Company

5,243

FY19

7,263

FY20

7,878

FY21

Source: MOFSL, Company

40%

Marketing costs CAGR at 23% over FY19-21

Adv & promotion costs (INRm)

34%

% Growth (YoY)

Opex / Marketing costs as % of revenue seeing constant

decline; moderates to 130%/51% v/s 169%/67% in FY19

Opex as % of revenue

169.0%

Adv & Promotion cost as % of revenue

140.8%

66.8%

53.9%

129.8%

51.5%

12%

2,072

FY19

2,779

FY20

3,123

FY21

Source: MOFSL, Company

FY19

FY20

FY21

Source: MOFSL, Company

October 2021

Policybazaar: Improving productivity; commission rate stands at ~5.5%

Total sum assured stands at INR7t as of FY21

Life

Non Life

2.4

0.9

0.7

2.9

FY19

3.9

4.6

Improving productivity – premium per advisor almost doubles

Total Prem per advisor (INRm)

NBP per advisor (INRm)

FY20

FY21

Source: MOFSL, Company

FY19

FY20

FY21

Source: MOFSL, Company

Overall blended commission rate stands at ~5.5%

Commission rates (%)

PAT trend for past few years

PAT (INRm)

5.7

5.5

(2,131)

FY19

(2,182)

FY20

(1,758)

FY19

FY20

FY21

Source: MOFSL, Company

FY21

Source: MOFSL, Company

October 2021

Policybazaar: Concentration of top insurers remains high in Life Insurance sector

Top 5 life insurers contribute ~96% to commission income in FY21

37%

19%

Top 5 general insurers contribute ~52% to commission income in FY21

Star Health

13%

43%

12%

10%

HDFC Ergo

Niva Bupa (Earlier Max)

Care Health

New India Assurance

Oriental Insurance

Others

Tata AIA

Max Life

ICICI Pru

HDFC Life

PNB Met Life

31%

Others

Source: MOFSL, Company

Others

Income Breakup across major life insurers

FY21 (INR m)

Tata AIA

Max Life

ICICI Prudential

HDFC Standard

PNB Met Life

Canara HSBC OBC

Aegon Religare

SBI Life

Bajaj Allianz

Edelweiss Tokio

Others

Total

Commission

319

266

162

867

Income breakup across major non-life insurers

FY21 (INR m)

Star Health

HDFC Ergo

Niva Bupa (Erstwhile Max)

Care Health

The New India Assurance

The Oriental Insurance

Bajaj Allianz

Aditya Birla

Royal Sundaram

IFFCO Tokio

Others

Total

Commission

216

209

199

166

110

493

1,724

Outsourcing

116

307

Others

133

386

Outsourcing

325

508

300

829

112

547

2,687

Source: MOFSL, Company

October 2021

Policybazaar: Outsourcing income a dominant revenue stream within Life Insurance

Life Insurance: Income from outsourcing services forms ~74% of

total income in FY21

Commission

1.5%

Outsourcing services

2.8%

Others

2.7%

18.9%

1.1%

Life Insurance: Mix of commission income stands healthy at ~71%;

income from outsourcing services accounts for ~13%

Commission

Outsourcing services

18.8%

6.5%

Others

16.0%

12.7%

82.1%

76.1%

73.6%

80.0%

74.7%

71.3%

16.3%

FY19

21.1%

FY20

23.7%

FY21

Source: MOFSL, Company

FY19

FY20

FY21

Source: MOFSL, Company

October 2021

Policybazaar: Financial statements, DuPont, and key business metrics

Income Statement (Y/E March) – INR m

Insurance Commission

Growth (%)

Other Services

Growth (%)

Revenue from operations

Growth (%)

Other Income

Total Income

Growth (%)

Operating Expenses

EBITDA

PBT

PAT

DuPont (As % of revenue)

Insurance Commission

Other Services

Revenue from operations

Other Income

Total Income

Operating Expenses

EBITDA

PBT

Tax

PAT

FY19

1,317

1,786

3,103

3,124

5,243

-2,067

-2,131

FY19

42.4

57.6

100.0

0.7

100.7

169.0

-66.6

-68.7

0.0

-68.7

FY20

2,134

62.0

3,026

69.4

5,159

66.3

5,188

66.1

7,263

-1,793

-2,182

FY20

41.4

58.6

100.0

0.6

100.6

140.8

-34.7

-42.3

0.0

-42.3

FY21

2,591

21.5

3,478

15.0

6,069

17.6

144

6,214

19.8

7,878

-1,495

-1,758

FY21

42.7

57.3

100.0

2.4

102.4

129.8

-24.6

-29.0

0.0

-29.0

Balance Sheet (Y/E March) – INR m

Share Capital

Reserves & Surplus

Net Worth

Trade payables

Other Liabilities & Prov.

Total Liabilities

Cash & Bank Balances

Investments

Trade Receivables

Fixed Assets

Current Tax Assets

Total Assets

FY19

531

-250

281

898

400

1,913

489

557

248

451

1,913

FY20

622

225

847

1,049

472

3,342

110

1,065

1,297

701

3,342

FY21

661

133

794

1,098

649

3,431

331

696

1,076

1,004

173

3,431

Business Metrics (Y/E March) – INR m

New business premium

Renewal premium

Total Premium

Growth (%)

New business premium Mix

Renewal premium Mix

No of policies sold (Nos. in Mn)

Total Premium per advisor (INRm)

New Business Prem. per advisor (INRm)

Commission rate (%)

Cost/Income (%)

EBITDA Margin (%)

FY19

17,187

5,967

23,154

74.2

25.8

3.0

6.3

4.6

5.7

169.0

-66.6

FY20

26,404

11,182

37,586

62.3

70.2

29.8

5.9

8.5

6.0

5.7

140.8

-34.7

FY21

27,429

19,584

47,013

25.1

58.3

41.7

7.2

14.1

8.2

5.5

129.8

-24.6

October 2021

October 2021

Paisabazaar

October 2021

Paisabazaar: Penetrating the Online Credit market; earnings trends improving



Largest digital consumer credit marketplace with ~51% share:

Paisabazaar began its operations

in FY14 with the goal to transform personal credit access by providing ease, convenience, and

transparency in selecting a variety of personal loans and credit cards. As of FY20, it was India’s

largest digital consumer credit marketplace, with market share of 51.4% based on disbursals.

Key metrics

Details

Customer base

Market Share (Digital players)

No of Partnerships

Self origination

Repeat customers

Credit card applications

FY21

Disbursal

Revenue

PBT

Net Profit

INR29.2b

INR1.9b

Key Stats

~21.5m

51.4%



Strong partner tie-ups offering diverse products:

Paisabazaar has partnered with ~54 lenders

across banks, NBFCs, and fintechs offering a wide choice of financial products on its platform.

66%

67%

2.8m



Key product offerings include personal loans, business loans, credit cards, home loans,

and loans against property.



It has further partnered with credit card issuers to offer a variety of credit cards and had

sourced ~2.8m credit card applications through its platform as of Mar’21.



Free credit score proving to be strong acquisition tool:

~21.5m consumers had accessed their

credit scores through Paisabazaar’s platform as of Mar’21. Furthermore, 66% of the loans

originated in FY21 were through consumers who visited Paisabazaar directly or via online brand

search. Conversely, 67% of disbursals in FY21 (40% over past three years) were made to existing

consumers, most of whom were acquired by Paisabazaar using the free credit score utility.

INR136m



Disbursements moderate over FY21; still achieves breakeven on strong cost control:

While

disbursals declined over FY21 due to the pandemic, a healthy pickup in marketing and consulting

fees, along with sharp control on opex, resulted in the company reporting PAT of INR136m for

FY21. ~35% of the small-ticket size loans disbursed in FY20 were within the INR5k range.

October 2021

Paisabazaar: Key product offerings and partner tie-ups

Unsecured Loans



Personal Loans

Transfer Personal Loans

Credit Cards

Micro Loans (<INR50k)

Secured Loans



New Home Loans

Transfer Home Loans

Loans Against Property

Gold Loans

Business Loans



Business Loans

Deposits



Savings Accounts



Fixed Deposits

Other Financial Products



Direct Mutual Funds



Free Demat Accounts

Financial Products

Personal Loans

Credit Cards

Home Loans

Gold Loan

Credit Bureau

Partner tie-ups



Axis Bank, Bajaj Finserv, Cashe, Clix, Early Salary, Faircent, Federal bank, Flexi Loans, Fullerton India, HDB

Financial Services, HDFC Bank, Home Credit, ICICI Bank, IDFC First Bank, Indiabulls, Indifi, IndusInd Bank,

Kotak Bank, Kredit Bee, Lending Kart, Money View, Muthoot, Neo Growth, PaySense, Rattan India, SME

Corner, Standard Chartered, Stashfin, Tata Capital, RBL Bank, UGRO Capital, Yes Bank



Amex, Citibank, HDFC Bank, ICICI Bank, IndusInd Bank, SBI Card, Standard Chartered, RBL Bank, Yes Bank,

SBM Bank



AB Capital, Axis Bank, BoB, Chola, Citibank, Federal bank, HDB Financial Services, HDFC Bank, HDFC Ltd, Hero

Housing, Home First, ICICI Bank, IDFC First Bank, Kotak Bank, L&T Finance, LIC HF, Standard Chartered, Tata

Capital, Union Bank



HDFC Bank, Rupeek



CIBIL, CRIF High Mark, Equifax, Experian

Source: MOFSL, Company website

October 2021

Paisabazaar: Strong marketing/consulting fees compensate for lower disbursals

Revenue CAGR of 10% over FY19-21

Revenue from operations (INRm)

46%

1,883

% Growth (YoY)

Commission

28.0%

16.6%

55.3%

Online marketing/Consulting

17.8%

18.8%

54.3%

63.4%

30.6%

Sale of leads

0.4%

14.7%

Others

Mix of commission income moderates sharply to ~31%, while

marketing/consulting fees form 54%

1,547

2,262

-17%

FY19

FY20

FY21

Source: MOFSL, Company

FY19

FY20

FY21

Source: MOFSL, Company

Commission income plunges due to drop in disbursals,

impacted by COVID-19

Commission from online aggregation (INRm)

68%

% Growth (YoY)

Marketing/Consulting sees strong growth of ~4x

Online marketing and consulting (INRm)

% Growth (YoY)

140%

66%

-60%

856

FY19

1,434

FY20

576

FY21

Source: MOFSL, Company

257

FY19

425

FY20

1,023

FY21

Source: MOFSL, Company

October 2021

Paisabazaar: Cost ratios seeing constant improvement, aiding profitability

Opex moderates significantly over FY19-21

Total Opex (INRm)

162%

144%

93%

C/I Ratio (%)

Staff expenses / Marketing costs form the bulk of opex

10%

52%

Staff Cost

Advertisement and

promotion

Network and Internet

charges

Depreciation

Payment gateway

charges

Other expenses

Source: MOFSL, Company

2,529

FY19

3,295

FY20

1,779

FY21

Source: MOFSL, Company

27%

Advertisement cost significantly declines in FY21

Adv & promotion costs (INRm)

22%

484

-69%

FY21

Source: MOFSL, Company

% Growth (YoY)

Opex / Marketing cost as % of revenue seeing constant

decline; moderates to 95%/26% v/s 164%/84% in FY19

Opex as % of revenue

163.5%

84.3%

Adv & Promotion cost as % of revenue

145.7%

70.1%

94.5%

25.7%

FY19

FY20

FY21

Source: MOFSL, Company

1,304

FY19

1,586

FY20

October 2021

Paisabazaar: Disbursement trends picking up; achieves breakeven in FY21

Disbursals down 55% YoY in FY21 – impacted by COVID

Disbursals (INRm)

28%

% Growth (YoY)

Quarterly disbursals pick up post COVID-19; stand at 64% of

pre-COVID levels

Disbursals (INRm)

18,217

-55%

15,986

9,938

1,097

5,383

12,744

FY19

FY20

FY21

Source: MOFSL, Company

Blended commission rate stands at 2%

Commission rates (%)

PAT trend for past few years – achieves breakeven in FY21

PAT (INRm)

136

1.7

2.2

2.0

(971)

(1,012)

FY20

FY21

Source: MOFSL, Company

FY19

FY20

FY21

Source: MOFSL, Company

FY19

October 2021

Paisabazaar: Financial statements, DuPont, and key business metrics

Income Statement (Y/E March) – INR m

Commission from online aggregation

Growth (%)

Other Services

Growth (%)

Revenue from operations

Growth (%)

Other Income

Total Income

Growth (%)

Operating Expenses

EBITDA

PBT

PAT

DuPont (As % of revenue)

Commission from online aggregation

Other Services

Revenue from operations

Other Income

Total Income

Operating Expenses

EBITDA

PBT

Tax

PAT

FY19

856

691

1,547

1,558

2,529

-947

-971

FY19

55.3

44.7

100.0

0.7

100.7

163.5

-61.2

-62.8

0.0

-62.8

FY20

1,434

67.5

828

19.9

2,262

46.3

2,290

47.0

3,295

-966

-1,012

FY20

63.4

36.6

100.0

1.2

101.2

145.7

-42.7

-44.7

0.0

-44.7

FY21

576

-59.9

1,308

57.9

1,883

-16.7

1,920

-16.1

1,779

160

136

FY21

30.6

69.4

100.0

2.0

102.0

94.5

8.5

7.2

0.0

7.2

Balance Sheet (Y/E March) – INR m

Share Capital

Reserves & Surplus

Net Worth

Lease liabilities

Trade payables

Other Liabilities & Prov.

Total Liabilities

Cash & Bank Balances

Investments

Trade Receivables

Fixed Assets

Current Tax Assets

Other Assets

Total Assets

Business Metrics (Y/E March) – INR m

Disbursals (INRm)

Repeat disbursals (%)

Ratios

Cost/Income (%)

EBITDA Margin (%)

Adjusted EBITDA Margin (%)

FY19

269

208

477

489

146

1,112

100

491

134

218

1,112

FY19

51,015

FY20

305

370

554

184

1,177

160

625

118

215

1,177

FY20

65,496

FY21

315

534

850

339

213

1,444

668

494

119

1,444

FY21

29,168

163.5

-61.2

-59.0

145.7

-42.7

-42.5

94.5

8.5

11.0

October 2021

Peer comparison

FY20

Policybazaar

InsuranceDekho

Renewbuy

Coverfox

Turtlemint

Products offered

Life and Non-Lie

Life, Motor and Health

Life, Motor, Health and

Corporate

Life, Motor and Health

Life, Motor, Health &

Crop/Livestock

Life, Motor and Health

Life, Motor, Health and

Travel

Motor and Health

Life, Motor and Health

Electronics

Type

Broker

Corporate Agent

Broker

Web Aggregator

Insurer

Tie-ups

40+

35+

Multiple

*As on FY19

Revenue (INRm)

6,069

329

433

323

1,258

EBITDA

(INRm)

-1,495

-297

-574

-786

EBITDA

Margin (%)

-24.6%

1.9%

-68.0%

-176.4%

-61.4%

PAT

(INRm)

-1,758

-5

-237

-582

-816

Gramcover*

Toffee Insurance

Symbo Insurance

Policyboss

PolicyX

OneAssist

658

2,460

-7

-92

-95

-737

-25.5%

-423.4%

-351.8%

8.1%

17.2%

-29.7%

-7

-93

-96

-836

Source: MOFSL, VCC Edge

October 2021

Global comparison

Revenue (USDm)

Insurance Marketplace

Hippo (US)

Goosehead (US)

Moneysupermarket (UK)

Everquote (US)

Fanhua (China)

Waterdrop (China)

Digital First Insurers

Lemonade (US)

Metromile (US)

ZhongAn (China)

eHealth (US)

CY18

60.1

474.8

163.3

525.2

34.6

CY18

22.5

54.3

CY19

34.7

77.5

495.9

248.8

536.6

217.0

CY19

67.3

52.8

CY20

51.6

117.0

442.8

346.9

474.1

463.8

CY20

94.4

35.1

CY21E CY22E

153.7

474.8

443.8

564.5

641.0

212.3

528.4

634.1

CY18

-11.4

149.6

-12.6

68.4

-27.1

CY18

-52.6

-46.1

EBITDA (USDm)

CY19

-76.9

16.2

164.6

-4.5

83.9

-27.0

CY19

CY20

-108.8

26.6

123.7

-3.5

60.0

-74.0

CY20

CY21E CY22E

26.3

148.5

25.0

71.1

-145.7

46.2

36.6

93.5

CY18

-8.9

115.6

-51.2

92.3

-30.4

CY18

-52.9

-49.4

-246.6

14.0

PAT (USDm)

CY19

-83.1

3.6

121.2

-6.1

27.4

-46.2

CY19

CY20

-141.5

9.3

89.0

-9.4

39.1

CY21E CY22E

7.5

97.2

-12.4

51.9

19.2

-8.0

68.7

-101.7 -244.8

CY20

CY21E CY22E

124.6

69.9

205.0

89.7

CY21E CY22E

-107.9 -120.8 -230.3 -250.8

-53.6

-38.1

117.1

-40.5

112.3

66.3

-131.5

154.6

117.7

-78.9

205.3

155.9

-108.5 -122.3 -236.8 -250.4

-57.2

-41.9

83.9

-120.1 -179.0

99.5

45.5

139.7

81.1

-87.1

197.9

107.9

1,454.0 2,189.8 2,683.0 3,436.9 4,201.0 -268.3

251.4

506.2

582.8

689.4

835.3

21.4

Source: MOFSL, Capital IQ, BBG

October 2021

Global comparison

Revenue Growth (%)

Insurance Marketplace

Hippo (US)

CY19

28.8%

CY20

48.7%

51.0%

CY21E

31.4%

CY22E

38.1%

CY19

EBITDA Growth (%)

CY20

64.0%

CY21E

-1.1%

CY22E

75.7%

CY18

-19.0%

EBITDA Margin (%)

CY19

CY20

CY21E

17.1%

CY22E

21.8%

-221.6% -210.9%

20.9%

22.7%

Goosehead (US)

Moneysupermarket (UK)

Everquote (US)

Fanhua (China)

Waterdrop (China)

Digital First Insurers

Lemonade (US)

Metromile (US)

ZhongAn (China)

eHealth (US)

4.5%

52.3%

2.2%

-10.7%

39.4%

-11.6%

7.2%

27.9%

19.1%

38.2%

CY21E

32.0%

99.3%

28.1%

18.3%

19.1%

12.3%

CY22E

64.6%

28.3%

22.2%

21.2%

10.0%

22.5%

CY19

448.0%

-24.9%

-28.4%

CY20

-43.4%

20.0%

18.4%

CY21E

37.7%

77.4%

46.0%

31.6%

CY22E

32.8%

32.5%

34.5%

-7.7%

13.0%

-78.2%

CY18

35.8%

-1.8%

15.6%

-12.4%

CY19

31.3%

-1.0%

12.7%

-16.0%

CY20

31.3%

5.6%

12.6%

-22.7%

CY21E

6.9%

14.8%

CY22E

526.7% 113.7%

CY19

199.1%

-2.9%

50.6%

101.4%

CY20

40.3%

-33.5%

22.5%

15.1%

-233.8% -160.3% -128.0% -184.9% -122.4%

-84.8% -101.5% -115.5% -188.1% -88.0%

-18.5%

8.5%

-1.7%

23.1%

4.2%

11.4%

4.5%

17.1%

4.9%

18.7%

Source: MOFSL, Capital IQ, BBG

October 2021

Global comparison

Mkt. Cap

Insurance Marketplace

Hippo (US)

Goosehead (US)

Moneysupermarket (UK)

USDb

2.5

6.2

CY18

103.7

CY19

71.5

80.5

P/Sales (x)

CY20

48.1

53.3

CY21E

40.6

CY22E

29.4

1.5

0.5

0.7

1.0

USDb

4.0

0.4

5.8

1.1

3.2

1.3

28.2

CY18

179.1

7.9

4.0

4.5

3.0

2.1

1.3

4.5

CY19

59.9

8.1

2.7

2.3

4.4

1.5

2.1

CY20

42.7

12.2

2.2

2.0

3.2

1.2

1.5

CY21E

32.4

6.1

1.7

3.0

1.0

1.1

CY22E

19.7

4.8

1.4

Everquote (US)

Fanhua (China)

Waterdrop (China)

Digital First Insurers

Lemonade (US)

Metromile (US)

ZhongAn (China)

eHealth (US)

Source: MOFSL, Capital IQ, BBG

October 2021

Market cap for Insurance sector grows at robust pace for past few years

Market cap CAGR for life insurers at ~18% since Nov’17; total

market cap stands at INR4t as of Oct’21

5,000

4,000

3,000

2,000

1,000

-1.6%

0.0%

Mkt Cap Life Life Insurance (INRb)

9.9%

Life Insurance – total premiums up 10% over FY17-21

Life Insurance Premium (INRb)

Growth YoY (%)

14.0%

12.7%

11.8%

10.8%

9.6%

9.4%

4.4%

6.3%

Source: MOFSL, BBG

Source: MOFSL, IRDAI, LIC Council

Market cap for non-life insurers stable since Nov’17; total

market cap stands at ~INR1.8t as of Oct’21

Mkt Cap Life Non-Life Insurance (INRb)

2,000

1,500

Non-Life Insurance – GWP up 12% over FY17-21

Non-Life Insurance Premium

33.0%

22.9% 24.1%

Growth YoY (%)

1,000

500

19.0%

13.8%

17.5%

5.2%

8.9%

9.2%

12.5%

11.5%

Market cap for Bajaj Finserv prorated at 20% to reflect the insurance business

Source: MOFSL, BBG

Source: MOFSL, IRDAII, General Insurance Council

October 2021

PB Fintech: Implied valuation and multiple analysis



Media articles suggest PB Fintech’s proposed IPO valuation stands at USD5–6b. We conducted two scenario analyses at the proposed

valuations to derive valuation multiples (P/Sales) and compared them with global peers.



We estimate a revenue CAGR of ~40% over FY21–24, led by 42% growth in premium income. We project the EBITDA / contribution

margin to expand to 4.8%/52.1% and market share to double to 2.1% in terms of total premiums within private players. Paisabazaar

has also seen a healthy pickup in disbursements, and we estimate a 45% CAGR over FY21–24E.



We note that globally companies with strong revenue growth and superior margin profiles trade at higher multiples. PB Fintech would

continue to invest in the business, which would support the growth momentum over the medium-long term. Thus, we believe robust

business growth, along with improving operating metrics, would enable the company to trade at higher multiples.



Thus, at proposed valuations of USD5–6b, the implied P/Sales multiple corresponds to 16–19x on FY24E.

Expect premium income CAGR at ~42% over FY21-24E

Premium Income (INRb)

62%

48%

39%

25%

23.2

FY19

37.6

FY20

47.0

FY21

69.7

FY22E

96.9

FY23E

135.4

FY24E

40%

15%

4.9

FY19

7.7

FY20

8.9

FY21

12.8

FY22E

17.4

FY23E

23.4

FY24E

% Growth (YoY)

Expect revenue CAGR at ~38% over FY21-24E

Revenue from Operations (INRb)

57%

44%

36%

35%

% Growth (YoY)

Source: Company, MOSL

October 2021

Estimate EBITDA/contribution margin to expand to ~5%/~52%; likely to achieve breakeven in FY23

Estimate C/I ratio to decline gradually to 98% by FY24E

Operating expenses (INRb)

174%

148%

123%

110%

104%

98%

As a % of revenue

Market share for Policybazaar to double to 2.1% by FY24E

Mkt share - NBP - Private

Mkt share - Total Prem - Private

Mkt share - Renewal Prem - Private

8.6

FY19

11.4

FY20

10.9

FY21

14.2

FY22E

18.1

FY23E

23.0

FY24E

FY19

FY20

FY21

FY22E

FY23E

FY24E

Source: MOFSL, Company

EBITDA/contribution margin to expand to 4.8%/52.1% by FY24E

EBITDA Margin

39.8%

8.6%

13.7%

-0.8%

-6.6%

-41.5%

-68.3%

FY19

FY20

FY21

FY22E

FY23E

FY24E

Source: MOFSL, Company

-18.0%

Contribution Margin

45.8%

Estimate Policybazaar to achieve breakeven by FY23

PAT (INRm)

49.0%

52.1%

4.8%

288

(1,502)

(3,040)

(368)

1,407

(3,468)

FY19

FY20

FY21

FY22E

FY23E

FY24E

Source: MOFSL, Company

October 2021

History of fundraises by PB Fintech, and underlying valuations

Year of raise

FY08-11

Apr'13

May'14

Apr'15

Oct'17

Jun'18

Nov'19

Jun'20

Mar'21

Funding

(INRm)

200

250

1,190

2,480

5,000

13,500

3,567

5,438

Funding

(USDm)

200

Valuation

(INRm)

250-420

1,650

5,950

33,333

67,500

107,100

112,880

174,000

Valuation

(USDm)

4-10

100

500

1,000

1,500

2,400

Clutch of investors

Softbank

Falcon Edge Capital

Company valuation crosses USD2b

Source: Media sources, MOSL, DRHP

Investors

Infoedge

Inventus Capital, Intel Capital

and Infoedge

Tiger Global and Ribbit Capital

Comments

Company valuation nears USD500m

Company achieves Unicorn status

Tiger Global sells ~10% stake to

Tencent at valuation of USD1.5b

October 2021

Key risks



The company maintains significant leadership in its product segments; however, the industry is turning increasingly competitive with

multiple fintechs entering the market that provide innovative solutions to cater customer needs.



As a web aggregator / broker, the continuity of partnerships with insurers and lenders is the key. Many of them are now coming up

with their own digital platforms. Thus, failing to attract partners / continue existing partnerships could impact the business.



The company derives revenues from the sale of financial services products, primarily based on the commission/ fee structure agreed

with partners. Any decline in these rates may impact revenues.



The resurgence of the COVID-19 pandemic could adversely affect business growth.



Technology infrastructure is vital; therefore, any disruption to it would pose a risk to the business.



Various laws and regulations govern its business segments – any adverse regulatory changes could impact business growth.

October 2021

Key management personnel

Key Personnel

Mr. Yashish Dahiya

Designation

Chairman, Executive

Director and CEO

Profile



Holds a bachelor’s degree in technology from IIT, Delhi; PG diploma in management from IIM,

Ahmedabad; and MBA from INSEAD, France



Previously associated with ITW Signode India Limited, Bain & Company Inc. (London), eBookers PLC (UK),

and CI2I Investments Limited



Holds a bachelor’s degree in technology from Shri Shahu Ji Maharaj University, Kanpur and PG diploma in

management from IIM, Calcutta



Previously associated with Voltas, GE International Operations Co. Inc. (India), iGate Global Solutions,

M&M, and FE Global Technology Services



Associated with the company since 3

Feb’14; holds a bachelor’s degree in engineering from DU and PG

diploma in management from IIM, Kolkata



Previously associated with Citibank (India), Capital One (Europe), and Aviva Life



Associated with the company since Nov’19; holds a Master of Management Studies degree from BITS,

Pilani and PG diploma in MBA from XLRI, Jamshedpur



Previously associated with HUL, Times Internet, and Yatra Online Private Ltd



Associated with the company over Sep’10-Jul’16 and joined once again in Feb’19; holds bachelor’s

degree of technology from IIT, Kanpur; holds a master’s in technology from NUS; and has completed the

Executive Programme in management from IIT, Calcutta



Previously associated with myMBSC.com Ptd. Ltd. (Singapore), IBM India Private Limited, and GEP

Solutions Private Limited



Associated with the company since Aug’08; holds a bachelor’s degree in commerce from Kurukshetra

University, is a CA and Associate of Insurance Institute of India



Previously associated with Fiamm Minda Automotive Limited, Ericsson India Private Limited, and FE

Global Technology Services Private Limited

Mr. Alok Bansal

Whole-time Director and

CFO

Mr. Naveen Kukreja

Co-Founder and CEO,

Paisabazaar

Chief Operating Officer,

Policybazaar

Mr. Sharat Dhall

Mr. Saurabh Tiwari

Chief Technical Officer,

Policybazaar

Mr. Manoj Sharma

Director Finance and

Principal Officer,

Policybazaar

October 2021

NOTES

October 2021

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October 2021

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Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022 71934200/ 022-71934263; Website

www.motilaloswal.com.

CIN No.: L67190MH2005PLC153397.Correspondence Office Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road, Malad(West), Mumbai- 400 064. Tel No: 022 7188 1000.

Registration Nos.: Motilal Oswal Financial Services Limited (MOFSL)*: INZ000158836(BSE/NSE/MCX/NCDEX); CDSL and NSDL: IN-DP-16-2015; Research Analyst: INH000000412. AMFI: ARN - 146822; Investment Adviser: INA000007100; Insurance Corporate

Agent: CA0579 ;PMS:INP000006712. Motilal Oswal Asset Management Company Ltd. (MOAMC): PMS (Registration No.: INP000000670); PMS and Mutual Funds are offered through MOAMC which is group company of MOFSL. Motilal Oswal Wealth Management

Ltd. (MOWML): PMS (Registration No.: INP000004409) is offered through MOWML, which is a group company of MOFSL. Motilal Oswal Financial Services Limited is a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs,Insurance Products and IPOs.Real

Estate is offered through Motilal Oswal Real Estate Investment Advisors II Pvt. Ltd. which is a group company of MOFSL. Private Equity is offered through Motilal Oswal Private Equity Investment Advisors Pvt. Ltd which is a group company of MOFSL. Research &

Advisory services is backed by proper research. Please read the Risk Disclosure Document prescribed by the Stock Exchanges carefully before investing. There is no assurance or guarantee of the returns. Investment in securities market is subject to market risk,

read all the related documents carefully before investing. Details of Compliance Officer: Name: Neeraj Agarwal, Email ID: na@motilaloswal.com, Contact No.:022-71881085.

* MOSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National Company Law Tribunal, Mumbai Bench.

October 2021