PB Fintech Allots 4.83 Million New Shares Under Employee Stock Option Plan

PB Fintech, the parent company of PolicyBazaar and Paisabazaar, has made a significant move by allotting 4,830,740 new shares under its Employee Stock Option Plan (ESOP). This development was officially reported through a stock exchange filing, which indicated that these shares, each with a face value of INR 2, were issued under the PB Fintech Employees Stock Option Plan 2021 to eligible members. However, the filing did not disclose the number of employees benefiting from this plan.

With the issuance of these new shares, the total number of shares in PB Fintech has increased from 45,120,346 to 45,603,4204. This move is expected to further incentivize and reward the company's workforce, potentially driving higher engagement and retention.

Stock Surge and MSCI Inclusion

In tandem with the share allotment, PB Fintech's stock experienced a notable surge of nearly 9% on Friday. This boost is largely attributed to the quarterly rebalancing by MSCI, which added PB Fintech stocks to the MSCI Global Standard Index. This adjustment took effect at the close of May 31, 2024, marking a significant milestone for the company.

The MSCI India Index saw the addition of 13 stocks and the removal of three in its May review. Notably, Paytm was among the stocks removed, while PB Fintech was added. This inclusion is a testament to PB Fintech's improving business fundamentals, particularly in its insurtech segment, Policybazaar, which has been witnessing a steady upward trend.

Financial Performance and Profitability

PB Fintech has shown remarkable financial performance, turning profitable in Q3 of FY24. The company recorded a consolidated net profit of INR 60.2 crore in Q4 of FY24, a significant turnaround from a loss of INR 9.3 crore in the same quarter of the previous year. Sequentially, the profit surged by 62% from INR 37.2 crore in Q3 of FY24.

Additionally, the company's operating revenue rose by 25% on both a quarter-on-quarter (QoQ) and year-on-year (YoY) basis to INR 1,089.6 crore in Q4 FY24. For the same quarter in FY23, the operating revenue was INR 869.1 crore. This growth reflects the company's robust business model and its ability to scale efficiently.

During the Q4 earnings announcement on May 7, PB Fintech highlighted its consistent efforts to improve customer service and claims support. These efforts have been well-received, with the company reporting a customer satisfaction score (CSAT) of 89% for Q4 FY24. This high CSAT score is a clear indicator of the positive impact of the company's customer-centric initiatives.

Strategic Developments and Future Plans

May has been a month of strategic developments for PB Fintech. The company received approval to divest stakes in at least two subsidiaries and to acquire a shareholding in a UAE-based insurance broker. Specifically, PB Fintech will divest a 29.3% stake, amounting to 2.93 lakh shares, in Visit Health Private Limited (VHPL) for INR 76 crore.

In addition to these divestments, PB Fintech is planning to incorporate a new wholly-owned subsidiary to enter the payment aggregation business. This subsidiary will be set up with a proposed authorized share capital of INR 50 crore and a proposed paid-up share capital of INR 27 crore. This move represents PB Fintech's strategic expansion into new business areas, aiming to diversify its portfolio and capitalize on emerging opportunities in the financial technology sector.