Stock in which FIIs are consistently increasing their stake; Do you hold it?

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Stock in which FIIs are consistently increasing their stake; Do you hold it?

On Saturday’s trade, the shares of India’s premier online insurance and lending product aggregator company closed at Rs 1,360 per share, gaining 2% from the previous close price on the exchange.

PB Fintech Ltd, popularly known as Policy Bazar, is India’s largest online platform for insurance and lending products through its flagship brands – Policybazaar (NS: PBFI ) and Paisabazaar, through which they provide convenient access to insurance, credit, and other financial products.

In the past month, PB Fintech shares have surged by 15%, solidifying its position as a large-cap stock with a market capitalization of Rs 59,769 crores.

In FY24’s third quarter, the company made significant steps toward reducing losses, moving closer to profitability. Building on this momentum, its performance in Q4FY24 saw profits double compared to the previous quarter, strengthening increased investor confidence and prompting Foreign Institutional Investors (FIIs) to increase their investment in the company. This positive financial trajectory, coupled with a market capitalization to exceed more than Rs 50,000 crores.

In the fourth quarter of FY24, the company experienced a significant surge in revenue, with its operations generating over Rs 1,090 crore. This growth was primarily driven by a substantial increase in sales within its insurance broking segment, which more than doubled compared to previous periods.

Additionally, PB Fintech’s stock has demonstrated strong performance, with a surge of around 70% in the past five months, which has attracted further interest from FIIs to raise their investments.

The favorable balance between risk and reward, coupled with the company’s promising potential for long-term growth, are additional catalysts driving FIIs to increase their position in PB Fintech.

Furthermore, as reported by Reuters, PB Fintech achieved its first-ever profit during the December quarter. This achievement was attributed to the company’s strategic decision to reduce marketing and promotional expenses, prioritizing profitability as a key focus area.

Morgan Stanley (NYSE: MS ) recently highlighted that PB Fintech’s Q4 results were primarily driven by robust performance in its insurance segment, while PB Fintech experienced slower growth in disbursements due to tightened credit conditions.The brokerage also pointed out that the company achieved a new record for its adjusted EBITDA margin.

On May 16th, 2024, PB Fintech Ltd.’s public shareholders divested a 1.84% stake for Rs 1,109 crore through an open market transaction. Yashish Dahiya, the Chairman and CEO, sold 29.7 lakh shares (1.19%) at Rs 1,325.15 each, while Alok Bansal, the Vice Chairman, and Whole-time Director, sold 29.7 lakh shares (0.65%) on the NSE, as per block deal data.

As of March, Dahiya and Bansal held stakes of 1.67% and 4.63%, respectively, in the company. In this transaction, Societe Generale (EPA: SOGN ) acquired 15.95 lakh shares (0.35% stake), Morgan Stanley purchased 14.65 lakh shares (0.32%), HDFC Mutual Fund acquired 3.75 lakh shares (0.12%), and Goldman Sachs (NYSE: GS ) obtained 3.45 lakh shares (0.11%).

In the fourth quarter of fiscal year 2024, PB Fintech Ltd witnessed a substantial 25 percent year-on-year surge in operational revenue, climbing from Rs 869 crore to Rs 1,089 crore. Simultaneously, the company underwent a notable turnaround in net profit, transitioning from a loss of Rs 9.34 crore to a profit of Rs 60.19 crore during the same period.

In the initial week of May 2024, PB Fintech’s board approved the acquisition of a 100% stake in Genesis Group Limited, a UAE-based firm, by its wholly-owned subsidiary, Icall Support Services Private Limited.

Genesis Group Limited, in turn, possesses a 49% stake in Genesis Insurance Brokers LLC. The acquisition, valued at AED 3,877,400, aims to enhance the company’s product offerings for customers in the UAE.

Genesis Insurance Brokers LLC is a registered Limited Liability Company with the Department of Economic Development in Dubai, UAE, having a deposited amount of AED 3 million with the DEA. The total enterprise value of this acquisition stands at AED 877,400, approximately equivalent to Rs 2 crore.

PB Fintech’s shares have surged by 64 percent in the last six months and by 120 percent in the preceding 12 months.

On May 18, PB Fintech Ltd.’s shares closed at Rs 1,361.05 each, marking a 2.54 percent increase on the National Stock Exchange, and the company has a market capitalization of Rs 59,769 crores.

Written by Omkar Chitnis

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