Indian insurance comparison site PolicyBazaar plans IPO for 2018
Indian insurance comparison website PolicyBazaar has plans to go public, with a flotation planned for next year, according to chief executive Yashish Dahiya. The eight-year old firm is discussing terms with investment banks, Dahiya said. The company is also close to completing a $50m round of fund raising. Total investment in the firm would give it a pre-IPO valuation of up to $400m after breaking even late last year. PolicyBazaar plans to use the cash to invest in its PaisaBazaar.com loan and credit card business, Dahiya said.

New Delhi: Policybazaar, an insurance comparison website run by EtechAces Marketing and Consulting Pvt. Ltd, has turned profitable and is readying itself for an initial public offering (IPO) by the end of 2018, a top company executive said.

The company is also close to raising a pre-IPO (initial public offering) round of about $50 million from new and existing investors, chief executive Yashish Dahiya said in an interview.

The eight-year-old company broke even in November 2016 and expects significant growth in profits on net basis in the year ending 31 March 2018.

According to Dahiya, the company will close the current fiscal with revenue of Rs210 crore and expects to post a profit of Rs50 crore on revenue of about Rs350 crore in the following year.

In 2015-16, sales at Policybazaar grew 30% to Rs109 crore while losses widened 72% to Rs110 crore.

The company, which has so far raised Rs410 crore since its start in 2008 largely from InfoEdge, Tiger Global Management and Premji Invest, is close to raising a Series E round of funding that will take the company’s valuation to $350-400 million. Dahiya did not disclose the names of the new investors.

“We are in late discussions of raising $50 million. This is not for business requirement but because we want to build balance sheet strength," Dhaiya said.

The funds may be used for expansion of the company’s loan and credit cards disbursement business PaisaBazaar.com, which it launched in August 2014.

“Policybazaar does not anticipate losing money here onwards, whatever investment we will make will be from this profit," Dahiya said, adding that Policybazaar has about $40 million in the bank.

He said the company managed a turnaround through a tight control on costs and with a focus on health, life, critical illness and accident insurance products, a category he sees as more lucrative than others such as endowment plans, money-back plans and unit-linked insurance.

“The policy business in the investment category (endowment and money-back plans) is slowly declining and is being taken over by protection policies," Dahiya said.

Our projection is that protection policies (life insurance, term insurance, health insurance, critical illness), which grew from 1% of entire first year premium of the industry in 2008 to 5% now, will grow to about 30%," Dahiya added.

“We focus on what we call triple-D market: disability, death and disease; protection insurance accounts for 73% of our total topline," he said.

The company will continue to focus on these categories, besides investing in PaisaBazaar.com.

It is also exploring to add more products in mutual funds category and expand low-ticket size mass products like two-wheeler insurance.

The company has already started working with investment bankers to ready itself for the IPO.

“We might do an IPO by October next year. The preparation has started; our CFO (chief financial officer) Alok Bansal is meeting people for the last six months," Dahiya said.

“A product such as ours is more suited on Nasdaq but the regulations restrict us there. We are currently taking advice on what will be a more suitable from a regulatory point of view," he added.

Founded in 2008, Policybazaar competes with Sequoia Capital-backed Bank Bazaar (A&A Dukaan Financial Services Pvt. Ltd) and new entrants such as Coverfox (Coverfox Insurance Broking Pvt. Ltd).

Policybazaar raised $40 million in April 2015, led by the investment arm of Wipro chairman Azim Premji, at a valuation of $210 million.

The 2,400-employee-strong company claims to close 120,000 policy deals every month.