PB Fintech Limited: Corporate Research

PBFL0351
PB Fintech Limited
CORPORATE RESEARCH Largest digital insurance and credit marketplace

PB Fintech Limited (PB) owns Policybazaar which is India’s
30 July 2021 largest digital insurance market place with a 93.4% market
share based on the number of policies sold in FY20 and
Revenue and Adjusted EBITDA trend Paisabazaar which is India’s largest digital consumer credit
(Rs.mn) marketplace with a 51.4% market share, based on disbursals
in FY20 as per Frost & Sullivan (F&S). High under penetration
Revenue Adjusted EBITDA
in the online insurance and lending markets in India (F&S)
10,000 8,867
7,713 positions PB Fintech well to capture this large opportunity.
8,000 Strong brands, proprietary technology, strong partnerships,
4,922
6,000 capital efficient business models and network effect across
4,000 segments are their key strengths. It strives to meet all of
2,000 customers’ insurance needs and become the destination of
0 choice for their credit solutions. It facilitates its insurer and
(2,000) (615) lending partners to innovate customised products leveraging
(4,000) (2,855) (3,032) their extensive data insights and analytics capabilities, and
FY19A FY20A FY21A expand its playbook to cater to SME and corporate clients too.
Note: Adjusted EBITDA excludes other India insurance/consumer lending market to cross US$1.5trn
income and share based payment by 2030: As of FY20, insurance and consumer lending markets stood
expense at US$102bn/437bn respectively but remains underpenetrated with
Source: Company sum assured to GDP at 25% and consumer debt to GDP at 16.7% vs.
265%/95% and 79.2%/55.6% for US/China respectively as of FY20.
Revenue from operations split (%) Rapid digital adoption, changing consumer behavior, government
initiatives and the current COVID-19 pandemic could drive insurance
Revenue split (%)
industry to cross US$520bn by 2030, growing at 17.8% CAGR while
Other Services consumer lending market is expected to witness 9.1% CAGR, reaching
Insurance Web Aggregator Services US$1,041bn by 2030 in outstanding balance, led by improving
100% financial literacy, growing discretionary spending, wider reach and
37% 33% 32% digitization of lenders and favorable regulations as per F&S.
Growth strategy: In order to deliver profitable growth, they aim to
50%
68% i) deepen consumer reach in India, ii) replicate platforms for SMEs
63% 67%
and corporates, iii) invest in tech infra, iv) pursue international
0% expansion and strategic investments, v) invest in product innovation.
FY19 FY20 FY21 Strong brands, network effect, partnerships and tech are key
strengths: PB’s strengths are 1) strong brand with 83%/67% of
Source: Company
policies/loans went to consumers who came directly to the platform or
through direct online brand search, 2) proprietary technology stack
and analytics ensures superior consumer experience, 3) strong
partnerships across 51/54 insurer and lender partners, and, 4) scale
providing strong network effects. Key risks: Regulations, competition.
Rishi Jhunjhunwala Financial Summary, (Rs. mn) FY19A FY20A FY21A
rishi.jhunjhunwala@iiflcap.com No. of Policies sold (mn) (1) 3.0 5.9 7.2
91 22 4646 4686 Growth (%) na 91.7% 22.0%
Total Disbursals (2) 51,015 65,496 29,168
Saurabh Thadani Growth (%) na 28.4% -55.5%
Saurabh.thadani@iiflcap.com Revenue 4,922 7,713 8,867
91 22 4646 4645 Growth (%) na 56.7% 15.0%
Contribution margin (3) (%) 8.6% 13.7% 39.8%
Preyank Sethi Adjusted EBITDA (4) (2,855) (3,032) (615)
preyank.sethi@iiflcap.com Adjusted EBITDA margin (%) -58.0% -39.3% -6.9%
91 22 4646 4650 Loss for the year (3,468) (3,040) (1,502)
www.iiflcap.com Note: (1) Total new policies sold through Policybazaar, and renewals; (2) Includes total value of loans
disbursed during the year and does not include credit limit for credit cards sourced through Paisabazaar;
(3) Contribution margin is calculated as revenue from operations less operating costs (employee benefit
expenses) and consumer acquisition costs (advertising and promotion excl. brand expenses) divided by
revenue from operations; (4) Adjusted EBITDA excludes other income and share based payment expense.
Source: Company
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PBFL0351
PB Fintech
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This report has been prepared by IIFL Securities Limited or one of its affiliates IIFL Securities Limited to
provide background information about PB Fintech Limited (the “Company”). IIFL Securities Limited is or may
be a member of the underwriting group in respect of a proposed offering of securities of the Company.
This report has been produced independently of the Company and the forecasts, opinions and expectations
contained herein are entirely those of IIFL Securities Limited. While all reasonable care has been taken to
ensure that the facts stated herein are accurate and that the forecasts, opinions and expectations contained
herein are fair and reasonable, IIFL Securities Limited has not verified the contents hereof and no reliance
should be placed on the accuracy, fairness or completeness of the information contained in this document.
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nor any of their respective directors, officers or employees, shall be in any way responsible for the contents
hereof, apart from the liabilities and responsibilities which may be imposed on them by the regulatory regime
thereunder. IIFL Securities Limited may in the future participate in an offering of Company’s securities. Any
opinions, forecasts or estimates herein constitute a judgement as at the date of this report. There can be no
assurance that future results or events will be consistent with any such opinions, forecasts or estimates. This
information is subject to change without notice and its accuracy is not guaranteed. It may be incomplete or
condensed and it may not contain all material information concerning the Company. Any decision to purchase
securities in any proposed offering should be made solely on the basis of the information to be contained in
the final offering documents (and any supplements or amendments thereto) to be published in due course in
relation to the proposed offering.
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PBFL0351
PB Fintech
Company Profile
PB Fintech has built India’s largest online platform for insurance and
lending products, leveraging the power of technology, data and
innovation, according to Frost & Sullivan. The company provides -
convenient access to insurance, credit and other financial products
and aims to create awareness amongst Indian households about the
financial impact of death, disease and damage. Through its
consumer-centric approach, it seeks to enable online research-based
purchases of insurance and lending products and increase
transparency, which enables consumers to make informed choices.
PB Fintech also facilitates its insurer partners and lending partners in
the financial services industry to innovate and design customised
products for consumers leveraging its extensive data insights and
data analytics capabilities.
Figure 1: PB Fintech Operating Revenue and EBITDA trend Figure 2: Revenue from operations split (%)
Rs. mn Revenue Adjusted EBITDA Revenue Insurance Web Aggregator Services

10,000 split (%) Other Services
8,000 100%
6,000 80% 37% 33% 32%
4,000 7,713 8,867
60%
2,000 4,922
40%
0 63% 67% 68%
(615) 20%
(2,000)
(2,855) (3,032)
(4,000) 0%
FY19A FY20A FY21A
FY19 FY20 FY21
Note: Adjusted EBITDA excludes other income and share based Note: Other Services consists of online marketing, consulting and
payment expense support services provided largely to the financial service industry by
Source: Company Paisabazaar and service provided by the company and its group
entities
Source: Company
PB Fintech launched Policybazaar, its flagship product, in 2008 to

respond to consumers’ need for more awareness, choice and
transparency and create a consumer-pull based, provider-neutral
model for insurance distribution. According to Frost & Sullivan, in
FY20, Policybazaar is India’s largest digital insurance market place
with a 93.4% market share based on the number of policies sold.
Furthermore, in FY20, 65.3% of all digital insurance sales in India by
volume were transacted through Policybazaar.
In 2014, PB Fintech launched Paisabazaar with the goal to transform

how Indians access personal credit by accentuating ease,
convenience and transparency in selecting a variety of personal
loans and credit cards. According to Frost & Sullivan, Paisabazaar is
India’s largest digital consumer credit marketplace with a 51.4%
share, based on disbursals in FY20. Paisabazaar is also widely used
to access credit scores, with approximately over 21.5mn consumers
cumulatively having accessed their credit score through its platform
as of FY21.
PB Fintech has an asset-light capital strategy and does not

underwrite any insurance or retain any credit risk on its books.
Policybazaar is registered with and regulated by IRDAI as a direct life
and general insurance broker. Both Policybazaar and Paisabazaar
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platform offerings address the large and highly underpenetrated

online insurance and lending markets.
Key Platforms
#1: Policybazaar platform
The Policybazaar platform (“Policybazaar”) is an online platform for
consumers and insurer partners to, respectively, buy and sell core
insurance products. As of FY21, 51 insurer partners have offered
over 340 term, health, motor, home and travel insurance products
on the Policybazaar, representing a substantial portion of all licensed
insurance companies in India.
Policybazaar offers consumers an information-rich, user-friendly, and

tech-driven self-service platform for i) pre-purchase research, ii)
purchase, including application, inspection, medical check-up and
payment; and iii) post-purchase policy management, including
claims facilitation, renewals, cancellations and refunds.
Policybazaar’s technology solutions are focused on automation and
self-service driven consumer experiences requiring minimal human
intervention. In FY21, 3.7mn policies, representing 80.4% of the
new policies sold through Policybazaar, were sold with minimal
human assistance.
Policybazaar provides their insurer partners access to its large

consumer base as well as deep behavioural and data insights for
improved risk assessment, better Underwriting capabilities and for
designing better insurance products. Policybazaar also offers
operational support (such as documentation and follow-ups) to both
consumers and Partners to enable superior consumer experience.
Figure 3: Key elements of Policybazaar’s functionality
Source: Company
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Figure 4: Online consumer Trends (India, China and USA)

Particulars
Total Premium (1) (INR bn) 47.1
Total Sum Assured (2) (INR tn) 7.0
Cumulative policies sold (3) (mn) (no.) 19.2
Cumulative transacting consumers (4) (mn) (no.) 9.6
Insurer partners(5) 51
Notes:
(1) Includes premium from new policies sold in a year and renewal premiums from life and
non-life insurance through Policybazaar in FY21
(2) Sum assured for all the policies sold through Policybazaar that are in-force during the year
and includes new policies sold as well as renewals from life and non-life insurance, as on 31
March, 2021.
(3) Cumulative number of new life and non-life insurance policies sold and non-life insurance
renewals on Policybazaar since its inception till 31 March, 2021.
(4) Cumulative number of unique consumers who bought at least one product on Poilcybazaar
since its inception till 31 March, 2021.
(5) Number of unique insurer partners as on 31 March, 2021.
Source: RBI, Frost & Sullivan Analysis
Benefits to consumers
Policybazaar is one of the most trusted insurance brands in India,

according to Frost & Sullivan. Policybazaar has built a consumer-first
platform, which has generated strong organic traffic and retention on
its platform. For instance, 83.0% of the premium they sourced for its
insurer partners during FY21 was through consumers coming to
Policybazaar directly or through direct online brand search.
Policybazaar believes the following are the key reasons why
consumers continue accessing its platform:
 Consumer-friendly, research and needs driven platform:

Policybazaar offers consumers the ability to research and
compare a wide range of insurance products offered by its insurer
partners, thereby increasing choice and transparency for its
consumers.
 Service and responsiveness: According to F&S, the insurance

industry is a process-heavy industry which can lead to lengthy
processing times at different stages of the transaction process.
Policybazaar provides convenient servicing options to its
consumers using technology integrations with insurer partners,
supported by its experienced, qualified and knowledgeable staff.
Consumers can directly raise issues, complaints or grievances to
insurer partners using its platform to get their queries resolved.
 Convenience of transactions: Policybazaar believes that the

transaction process on its platform is a faster and more secured
option for consumers as compared to traditional offline
alternatives. Since they provide numerous options from multiple
insurer partners, consumers do not need to visit the platforms of
the multiple insurer partners individually, but can instead explore
many options in one place directly through Policybazaar.
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Benefits to insurer partners
Insurer partners use Policybazaar’s large consumer base, technology

solutions and infrastructure to improve their operations with a high
quality consumer base that features low claims ratio with lower
consumer acquisition costs. Policybazaar strives to act as a fair
partner to all its insurer partners by adding value across the product
value chain from consumer acquisition to claims settlement.
Policybazaar believes the following are the key reasons why insurer
partners offer their products on its platform:
 High quality consumer base with lower consumer

acquisition costs: Policybazaar provides insurer partners with
access to a quality and growing consumer base, consisting of a
high proportion of young, digitally-savvy users, according to
Frost & Sullivan. Capturing the data generated by its consumer’s
online journeys and using recorded lines for all consumer
interactions enables Policybazaar to maintain high disclosure
rates, offering an attractive value proposition to both new and
smaller insurers as well as incumbent players. In addition, its
high brand recall, ability to independently attract consumers to
its platform and better consumer targeting due to its data
insights and analytics significantly lowers the consumer
acquisition costs for its insurer partners. According to Frost &
Sullivan, the consumer acquisition cost for Policybazaar’s insurer
partners is one of the lowest on its platform when compared to
other online and offline channels.
 Accurate risk assessment and better Underwriting

capabilities: Policybazaar has collected extensive data and
consumer insights, driven by high levels of self-disclosure from
its consumers including, among others, their lifestyle, family
history, pre-existing medical conditions and financial profiles.
These data insights help its insurer partners with more accurate
risk assessment and pricing. By providing its insurer partners
with unique digital data insights and analytics to drive profitable
risk selection, the company enables them to generate advanced
pricing simulation and underwriting models. According to Frost &
Sullivan, its partners generally have lower lapse rates, higher
renewal rates and lower claims ratio for insurance policies
originated on Policybazaar.
 Technology integrations: Policybazaar’s open architecture is

conducive for technology integrations with insurer partners, thus
making the consumer experience seamless. It enables real-time
data sharing and pricing simulations. Policybazaar continuously
automates the processes across policy purchase and issuance,
servicing and renewals, thereby streamlining processes for its
insurer partners. It also work with its insurer partners to create
dedicated and customised technology based solutions for various
process flows, such as offering video inspections of motor
vehicles to replace physical inspections, digital KYC and online
document collection to replace physical document collection, and
facilitating endorsements, cancellations, refunds and grievance
redressal directly through its platform to replace a separate email
or call centre based approach.
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PB Fintech
Policybazaar App
Figure 5: Pictorial guide of the consumer experience on Policybazaar app

One Platform For all the Product Features in Compare Comprehensive List
Consumer’s Insurance Jargon-Free Language of Plans and Get Customised
Needs Quotes
Consumer Name
Consumer’s Name Life Cover Cover till Payment
1 Crore 60 yrs Monthly
Type
Partner 1 97.9% ₹ 1,396
Claims
Partner 2 99.1% ₹ 1,398
Partner 3 99.2% ₹ 1,277
Claims
User-Friendly Interface
To Track & Manage Resolve Consumer Concerns
360o Consumer Service Consumer Claims Via FAQs, Chat Or Call Center
Executives
Partner
1
Partner 1
Partner 1 Vehicle
HYUNDAI 10 1.2 KAPPA
Product Registration Number Valid till
Car XXXX May 10, 2021
Partner 2
XXXX XXXX Plan
NCB Super Premium

Product Cover Valid till
XXXX XXXX
Health ₹ 5 Lakhs Apr 15, 2022
XXXX XXXX
Source: Company
#2: Paisabazaar platform

Paisabazaar platform (“Paisabazaar”) is an independent digital
lending platform that enables Consumers to compare, choose and
apply for personal credit products. It has built 54 partnerships with
large banks, NBFCs and fintech lenders, who offer a wide choice of
product offerings on its platform across personal credit categories,
including personal loans, business loans, credit cards, home loans
and loans against property. It are focused on scaling Paisabazaar as
a digital personal credit platform for varied consumer segments to
make personal credit products offered by its lending partners
available through an online and easily accessible platform, through
partnerships with banks and NBFCs either directly or through fintech
lenders.
Paisabazaar business model is based on resolving fundamental

consumer concerns when accessing personal credit products.
According to Frost & Sullivan, these concerns include:
PBFL0351
PB Fintech
• challenges in comparing products and offers from multiple

lenders;
• difficulties in determining the best-suited offer and lender;
• information asymmetry and lack of transparency about eligibility,
costs etc.;
• low awareness around credit score;
• lack of expert advice and end-to-end assistance; and
• cumbersome processes involving paper-heavy documentation,
leading to higher application processing times.
Paisabazaar’s algorithm-based technology platform provides

consumers with access to multiple personal credit offers across all
segments, data-driven product recommendations, comparison tools,
unbiased advice on the most suitable offers and digital KYC
processes that make loan and credit card applications seamless.
Paisabazaar helps consumers to become more credit aware. It runs

India’s largest credit awareness initiative in partnership with all four
credit bureaus in the country, offering free access to credit reports,
as per Frost & Sullivan. Approximately over 21.5mn unique
consumers have accessed their credit score from Paisabazaar as of
March 31, 2021. This has enabled Paisabazaar to offer more
personalised and accurate product recommendations to consumers,
using its analytics tools and technology integrations with its lending
partners, which has led to higher consumer engagement and
retention rates on the platform. 40% of the disbursals in the last
three Fiscal years, including 67% in FY21, were to existing
consumers, most of who were acquired by Paisabazaar using the free
credit score utility.
Benefits to consumers
 Easy access to credit: Paisabazaar’s algorithm-based

technology platform provides consumers with access to multiple
personal credit offers, ease of comparison of multiple offers
available and unbiased advice. Further, Paisabazaar provides
access to mainstream personal credit products to remote towns
and areas. From application to disbursal, Paisabazaar
accompanies the consumer at each step, providing last-mile
assistance such as document collection and assistance until
disbursal or policy issuance, and advice through its dedicated
team of experts including a proprietary model indicating the
chance of approval after application as well as consumer service
advisor support.
 Free access to credit score for all Indians: According to Frost
& Sullivan, a primary reason behind low approval rates in lending
has been the lack of awareness among consumers about their
credit scores. Paisabazaar offers consumers lifetime access to
their credit scores for free, which helps them become more credit
aware. Consumers can check, track and improve their credit
score over time, which in turn may increase their eligibility for
credit in the future.
Benefits to lending partners
 Operational efficiency and reduced acquisition costs: By

providing Paisabazaar’s lending partners with access to varied
consumer segments, high quality consumer data and creating
digital capabilities such as digital KYC that can be easily
integrated, Paisabazaar believes that it has helped its lending
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PB Fintech
partners achieve operational efficiencies and stronger

Underwriting and risk pricing. In addition, through data analytics
based consumer targeting, its partners are able to reduce their
consumer acquisition costs. Paisabazaar reduces the need for in-
person interactions as the entire transaction process of availing
personal credit from its lending partners can be done on the
platform.
 Exclusive innovative products for untapped segments: As a

completely digital platform accessed by numerous consumers
each month, Paisabazaar has gathered unique consumer insights,
including credit need gaps for specific segments that can be met
efficiently and scaled over time through innovative lending
products. Using its consumer insights, it help its lending partners
to develop digital products offered exclusively on its platform,
including pre-approved loans and co-branded credit cards, which
help them reach untapped consumer segments.
Paisabazaar App
Figure 6: Pictorial guide of the consumer experience on Paisabazaar app

One Platform For all the Get Detailed Credit Score Pre-Approved from
Consumer’s Credit Needs For Free India’s Top Banks and
NBFCs
Partner 1
Partner 1’s
Partner 2
Partner 2’s
Compare Curated Offers Quick Options Menu To Additional Features Like

Sorted By Chance of Provide Ease of Use To EMI Calculator For
Approval Consumers Consumers’ Benefit
Compare Credit Card

Consumer Mobile Number
Product 1 Product 2
Product 1
Description Product 2
vs Description
Apply Now Apply Now
Select another card Select another card
Approval Chances
Excellent Very Good
Best Suited For
 Movies  Movies
 Shopping  Lounge
 Fuel  Dinning
Welcome Offer
 Get 50 Reward Points  Get Amazon.in gift card

as welcome gift worth ₹500 on joining
Special Offer
Source: Company
PBFL0351
PB Fintech
Figure 7: PB Fintech – Key performance indicators

PB Fintech - Key performance indicators FY19 FY20 FY21
Total Premium (Rs mn) (1) 23,154 37,586 47,013
Y-o-Y growth (%) - 62.3% 25.1%
New Business Premium (Rs mn)(2) 17,187 26,404 27,429
Y-o-Y growth (%) 53.6% 3.9%
Premium per advisor (Rs mn) (3) 6.3 8.5 14.1
Total Sum Assured (Rs bn) (4) 3,547 4,818 7,019
Life (Rs bn) 2,895 3,925 4,633
Non-Life (Rs bn) 653 893 2,385
Total Disbursals (Rs mn) (5) 51,015 65,496 29,168
% of Disbursals from existing users (%) (6) 42.0% 60.0% 67.0%
Total Operating income (Rs mn) 4,922 7,713 8,867
Y-o-Y growth (%) - 56.7% 15.0%
Insurance Web Aggregator Services (Rs mn) 3,103 5,159 6,069
Other Services (Rs mn) 1,819 2,554 2,797
Contribution Profit (7) (Rs mn) 422 1,053 3,530
Contribution Margin (%)(7) 8.6% 13.7% 39.8%
Adjusted EBITDA (8) (Rs mn) (2,855) (3,032) (615)
Adjusted EBITDA Margin(8) (%) -58.0% -39.3% -6.9%
Notes:
(1) Includes premium from new policies sold during the year through Policybazaar and renewals premiums from life and non-life insurance.
(2) Includes premium from policies sold during the year by insurer partners through Policybazaar and does not include renewals from life and
non-life insurance.
(3) Advisors include call centre employees who are directly communicating with consumers and helping them make a purchase decision.
(4) Sum Assured for all policies sold by insurer partners through Policybazaar that are in-force during the year and includes new policies sold
as well as renewals from life and non-life insurance.
(5) Includes total value of loans disbursed during the year by lending partners through Paisabazaar and does not include credit limit for credit
cards sourced through Paisabazaar.
(6) Proportion of loan disbursals to existing base of credit score consumers during the year.
(7) Contribution profit is a Non-GAAP financial measure. We define Contribution profit as revenue from operations less operating costs.
(employee benefit expenses) and consumer acquisition costs (advertising and promotion expenses but excluding brand spends).
Contribution margin is the percentage margin derived by dividing contribution profit by revenue from operations.
(8) EBITDA is a Non-GAAP financial measure. The company defines EBITDA as its restated loss for the year, before income tax expense, finance
cost, depreciation and amortisation expense and other income. Adjusted EBITDA is a Non-GAAP financial measure. The company defines
Adjusted EBITDA as its restated loss for the year, before income tax expense, finance cost, depreciation and amortisation expense, other
income and share based payment expense. Adjusted EBITDA margin is the percentage margin derived by dividing Adjusted EBITDA by
revenue from operations.
Source: Company
Employees: PB Fintech had 7,310 full-time employees as of March

31, 2021
Figure 8: PB Fintech – Number of full-time employees

Function Number of full-time employees
Technology and product management 462
Operations 6,436
Sales and Marketing 161
General Administration 251
Total 7,310
Source: Company
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PB Fintech
Figure 9: Shareholding Pattern (as on the date of the Draft Red Herring Prospectus)
Key shareholders Number of Percentage of the pre-
equity shares offer equity share capital
held* (%)
Makesense Technologies Limited** 59,890,000 14.56
SVF Python II (Cayman) Limited 38,877,500 9.45
Tencent Cloud Europe B.V. 37,665,000 9.16
SVF India Holdings (Cayman) Limited 25,940,000 6.31
Claymore Investment (Mauritius) Pte Ltd 25,737,500 6.26
Etechaces Employees Stock Option Plan 22,537,500 5.48
Trust***
Tiger Global Eight Holdings 19,032,500 4.63
Diphda Internet Services Limited 18,880,000 4.59
Mr. Yashish Dahiya 17,545,000 4.27
PI Opportunities Fund – II 15,525,000 3.78
Internet Fund III Pte Limited 12,897,500 3.14
Falcon Q LP 11,589,500 2.82
Steadview Capital Mauritius Limited 9,812,500 2.39
True North Fund VI LLP 9,440,000 2.30
Startup Investments (Holding) Limited 8,662,500 2.11
Ithan Creek MB 7,515,000 1.83
Investus Capital Partners Fund II, Limited 6,437,500 1.57
Mr. Alok Bansal 5,958,500 1.45
ABG Capital 4,385,000 1.07
Alpha Wave Incubation LP 4,320,000 1.05
Total 362,648,000 88.22
Note: Shareholders holding 1% or more of the paid-up share capital of our Company
*of face value Rs. 2
**Once NCLT approval in respect of the Amalgamation Scheme has been obtained and it
becomes effective, the company shall allot Equity Shares on a proportionate basis to Info Edge
and Macritchie Investment Pte. Ltd., shareholders of Makesense, in consideration of its
amalgamation with the Company, and all Equity Shares held by Makesense in the Company
shall stand cancelled, without any further act or deed, as an integral part of the Amalgamation
Scheme.
***All employee stock options vested as on date are held by the Etechaces Employees Stock
Option Plan Trust and subsequently shall be allotted or transferred to the employees upon
exercise of such employee stock options in accordance with the terms of the ESOP Schemes.
Source: Company
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Industry overview
Rapid digital adoption with internet and smartphone
penetration doubling from 2015 to 2020
In the last five years, India has seen exponential growth in internet
penetration, with over 621mn people in India (45% of the
population) connected with the internet in 2020 compared with
314mn people (24% of the population) in 2015. This swift adoption
of the internet is made possible by falling data prices, low-cost
smartphones, adoption of 3G/4G technologies and the government’s
push for ‘Digital India’.
From 2015 to 2020, India also witnessed significant smartphone

adoption, with over 39% of people using smartphones in 2020
compared to 17% in 2015. Today, India has the second-highest
number of smartphone users globally (after China). The impact of
Covid-19 has further propelled digital adoption with a preference for
convenience and safety rather than stepping outdoors.
India is expected to see a significant jump in internet adoption

across a broad spectrum of services with rising digital infrastructure,
growing tech-savvy young population, changing consumer
preferences towards online transactions & shopping, and impetus
provided by the Government of India for digital inclusion. As a result,
by 2030, India is expected to have 1,128mn internet users, 1,083mn
smartphone users, 571mn mobile wallet users, and 541mn online
shoppers, mirroring the penetration levels in USA and China and
ultimately leading to growth across industries.
Figure 10: Online consumer Trends (India, China and USA)

Internet Penetration Smartphone Penetration
Payment Wallets Penetration Online Shopping Penetration
90%
82%
100%
77%
75%
72%
65%
63%
63%
80%
59%
57%
54%
45%
60%
39%
38%
36%
28%
23%
22%
40%
14%
14%
20%
0%
FY20 FY25ii FY30ii FY20 FY20
India China USA
Source: RBI, Frost & Sullivan Analysis
Improving Financial Literacy in India

While the penetration of financial services in India is currently low, it
is gradually improving with the changing consumer behavior,
technological advancements, and constant efforts from the
Government of India.
 Changing consumer behavior: People in India can now save

and invest more because of rise in per capita disposable income,
leading to more people coming into the financial services space.
Furthermore, the Covid-19 pandemic and associated lockdowns
have increased Indian consumer’s awareness about health and
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physical well-being. This has led to an increased propensity

among Indian consumers’ to purchase financial products online,
thereby making them susceptible to financial information being
disseminated through online channels.
 Technological advancements: The rapid adoption of the

internet, a surge in e-commerce and increased smartphone use
in both rural and urban areas is helping in the quick adoption of
financial services such as P2P mobile payments, online insurance,
online credit, mutual funds investing & online trading by
improving consumer awareness and convenience. Companies in
India have been instrumental in simplifying finance by educating
people about the benefits and risks of various financial products.
These companies assist consumers by leveraging digital
technology and developing better infrastructure to provide
quality, protection, affordability and accessibility to financial
services and low-cost banking solutions. Overall, technological
advancements by companies contribute to break the urban-rural
divide, bringing more people into the financial services system.
 Government of India initiatives: Initiatives such as India

Stack, Pradhan Mantri Jan Dhan Yojana (PMJDY), Pradhan Mantri
Mudra Yojana (PMMY), Pradhan Mantri Jeevan Jyoti Bima Yojana
(PMJJBY), Ayushman Bharat Pradhan Mantri Jan Arogya Yojana
(PMJAY) are aiding in improving financial literacy in India, which
is currently low.
Insurance Industry in India

In FY20, India had a Rs7.6tn (US$102bn) insurance industry,
measured in terms of Total Premium. This industry is expected to
grow at a 17.8% CAGR to reach Rs39tn (US$520bn) by FY30, with
life, health and other non-life insurance growing at 18.8%, 15.3%
and 13.5% CAGR respectively, as per Frost & Sullivan.
Figure 11: Insurance Industry is expected to grow at a 17.8% CAGR by 2030
India Insurance Market by Total Other Motor Health Life

Premium (Rs. tn)
45.0
CAGR: 17.8% 39.0
40.0 2.0
35.0 2.6
30.0 2.5
25.0
20.0
15.0 31.9
10.0 7.6 0.6
5.0 0.7
5.7 0.6
-
2020 2030E
1. Total Premium of Life Insurance is the sum of total premium underwritten by LIC and
private sector life insurers and includes individual and group new business and renewals, if
any.
2. Total Premium of Non-Life Insurance (Health, Motor and Other) represents Gross DIrect
Premium Income earned by non-life insurers from individual and group new business and
renewal, if any.
Source: Frost & Sullivan Analysis
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However, as compared with global peers, India has a highly

underpenetrated insurance market. India was amongst the lowest in
the world in terms of Sum Assured as % of GDP in 2020. India
mortality protection gap as a percentage of protection was at 83.0%
in 2019, one of highest in the world, despite Indian households being
disproportionately dependent on a single income earner.
Figure 12: At 25%, India was amongst the lowest in the world Figure 13: At 83%, India’s mortality protection gap was one of
in terms of Sum Assured as % of GDP in 2020 the highest in the world in 2019
Sum Assured as a % of GDP(1) Mortality Protection Gap(1) as a % of protection needed, 2019
300%
100%
250%
200% 80%
273%
265%
150% 60%
252%
100%
142%
83%
25%
131%
40%
113%
71% 70% 61%

95%
50% 55% 54% 48%

20% 41%
0%
USA
South Korea
Malaysia
Singapore
Thailand
China
Japan
India
0%
USA
Thailand
Australia
Singapore
India
China
Hong
Japan
Kong
(1) Represents Total Sum Assured for FY20 for India, USA and China; (1) Calculated as income replacement plus household debt less total
FY18 for Japan and South Korea and FY17 for other countries. savings, non primary property value, life insurance, other assets
Source: Frost & Sullivan Analysis Source: Frost & Sullivan Analysis
Over the last two decades, the penetration of non-life insurance in

India, in terms of gross direct premium as % of GDP, has come close
to holding ~1.0% of GDP. However, this is considerably low
compared with 6.5% in USA and 2.1% in China. 72.3% of population
in India are uninsured as compared to 10.9% in USA and 35.0% in
China as per Frost & Sullivan.
Figure 14:Non-life insurance penetration, 2020

Non-life insurance penetration, 2020 India USA China
Gross Direct Premium as a % of GDP(1) 1.0% 6.5% 2.1%
As % of population with no insurance(2) 72.3% 10.9% 35.0%
(1) As of FY20 for India
(2) As of CY19 for India and USA
In 2018, India’s health expenditure was amongst the lowest globally

at Rs5.5 thousand (US$73) per capita, compared with Rs83.3
thousand (US$1,111) per capita in USA, and Rs37.6 thousand
(US$501) per capita in China. Additionally, 63.0% of India’s
healthcare expenditure was funded out of pocket in 2018, with only
10.0% getting financed by health insurance.
Low penetration in insurance industry stems from financial illiteracy,

lack of awareness of need and sufficiency of insurance, low
household disposable income, complex products, gaps in product
offerings and inefficiencies in distribution system. Opaque cost
structures, hidden fees, difficult to understand language and jargons
has made people averse to insurance products. With limited
disposable income, it is also difficult for most people in India to pay
annual premiums to protect their life, health and other assets. The
majority of people in India also view life insurance as an investment
and tax-saving tool. People have been unenthusiastic to pure
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protection products as no monetary benefits accrue during life of the

individual. On the distribution side, reach remains low and is a push
driven model with agents, brokers and bank channels serving as
primary sales channel. Lastly, there is no legal requirement for
people in India to purchase non-life insurance (except 3rd party
motor insurance), contributing to its low penetration.
Figure 15: India has low Health Expenditure per capita(1) Figure 16: 63% of Healthcare Spend is out of pocket(1)
Rs. thousands Out of Pocket Spends (% of Healthcare Expenditure)
90 83.3 70% 63%
80
70 63.6 60%
60 50%
50 37.6
40 32.0 40% 35%
30 20.7 28%
30%
20 11.4 8.4 5.5 17%
10 20%
11%
0
10%
USA
Indonesia
Brazil
Malaysia
Thailand
Vietnam
China
India
0%
India Indonesia China UK USA
(1) Healthcare expenditure data as of 2018 (1) Healthcare expenditure data as of 2018
Life Insurance
India is the world’s 10th largest life insurance market, worth Rs5.7tn
(US$76bn) in FY20 in terms of total premium. Despite being 10th
largest, India’s life insurance penetration remains lower at 24.6%,
compared to 265.0% in USA & 95.4% in China when measured in
terms of Sum Assured as % of GDP, as of March 2020.
Figure 17:India’s life insurance market is expected to grow at 18.8% p.a. up to 2030
Total Premium in Life Insurance - India

Rs. tn, CAGR
35 31.9
30
25
20
15 11.5
10 5.7
5
0
2020 2025ii 2030ii
Industry participants are focusing on simplification of insurance

process across the value chain ranging from documentation to
underwriting to issuance. Introduction of eKYC, tele medicals, digital
application forms and claim filing through website and linked bank
accounts are some of the changes introduced by industry
incumbents. Online players are playing a big role in making
insurance purchase simpler and more convenient. Additionally,
product and process innovation by manufacturers as well as
insurtech players is narrowing the gap with consumer needs. Better
policy management and easier claims process is also playing a key
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role in enhancing consumer experience. Companies are also

becoming better at assessing risks by adopting and deploying
emerging technologies like data analytics and artificial intelligence
and offering customized underwriting based on customer profile.
In the last five years, the government has consistently supported the
digitalization of services in India, resulting in the world’s leading
public digital infrastructure based on Aadhaar and UPI. Additionally,
in 2021, IRDAI directed life insurers to standardize term insurance
through Saral Jeevan Bima. This is expected to make it easy and
convenient for the consumers to compare and buy term insurance
plans. Furthermore, income tax benefits under the exempt, exempt,
exempt (EEE) method of taxation available in section 10(10D) and
80C of the Indian Income Tax Act, 1960 are also expected to
encourage middle-class consumers to invest in life insurance policies.
The spread of the Covid-19 pandemic has further raised public

awareness about life and health risks and has increased demand for
protection products. Consumers are becoming cognizant of their
vulnerabilities and are able to better understand the benefits of
buying life insurance products to ensure their dependents remain
financially afloat for a long time.
Non-Life Insurance
India was the world’s 15th largest non-life insurance market in terms
of gross direct premium, worth Rs1.9tn (US$25bn) in FY20. With
consistent growth of disposable income in recent years, Indian
households tend to diversify their consumption and purchase more
financial products and insurance products. Risk awareness regarding
the need for protection for any contingency are improving in India
due to increasing financial literacy, urbanization and advance
education system.
Figure 18:India’s non-life insurance market is expected to grow at 14.3% p.a. up to

2030
Gross Direct Premium in Non-Life Insurance - India
Rs. tn, CAGR
8 7.1
7
6
5
4 3.3
3 1.9
2
1
0
2020 2025ii 2030ii
The lack of public health infrastructure, insufficient coverage of

health insurance by government and expensive private healthcare
facilities has brought insurance into limelight particularly during
impending COVID-19 pandemic. In the future, with rising medical
inflation and ~15% of the population in India turning 40 years old in
the next ten years, India’s health expenditure is expected to grow
manifold. As a result, health insurance segment will become one of
the most significant contributors to the growth of overall non-life
insurance in India. Rise in affordability of motor vehicles is expected
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to drive demand for motor insurance. Rapid rise in the urban middle-
class households is expected to drive demand for housing and
consequently more demand for property insurance.
In 2020, IRDAI allowed the issuance of health policies digitally,

without physical documents and wet signatures. In addition, recent
technological advancements on the distribution side, such as online
insurance has led to a wider reach of non-life insurance in India and
improving consumer experience. Regulations around withdrawal of
bundled own damage / 3rd party insurance policies (2020) and
allowance of point-of-sale (PoS) agents to sell insurance products
(2017) are also expected to enable higher penetration for 2-wheelers
3rd party insurance. After the Reserve Bank of India (RBI) allowed
lenders to act as insurance brokers in 2015, the number of tie-ups of
banks with insurers has increased with deeper product level
collaborations. Special income tax benefits under section 80D of the
Indian Income Tax Act, 1960 are also expected to encourage middle-
class consumers to buy medical insurance policies for themselves
and their family.
Addressing the Challenges in the Indian Insurance Industry

The Indian insurance industry faces challenges such as high
turnaround time in policy issuance due to manual processing of
documents, lack of standardization of product features, lack of
proper assistance for claims filing, and lack of full transparency
about costs. Higher controls over the insurance sales process by
manufacturers, introduction of standardized products and digitization
across the value chain is helping in reducing these challenges. This is
led by constant efforts from insurance players and regulator in
digitizing manual processes, improving transparency, and spreading
consumer awareness. Digitization is also helping insurers to reduce
processing time by improving and simplifying the overall insurance
policy issuance and claims process. Further, players are focusing on
maintaining a complete record of consumer interactions (including
voice calls) for better risk management.
Role of Technology in the Insurance Industry

Technological innovations are now helping insurers and fintech
companies to increase productivity, improve consumer experience
and cut operational costs, thereby creating value across the chain.
These companies also leverage their deep data insights to
understand specific consumer needs and provide a wider choice of
customized products, improving the attractiveness of online financial
services. Furthermore, using advanced technologies such as artificial
intelligence and big data, such companies can create data-driven,
risk-scoring models, thereby enabling better risk coverage across all
lines of insurance business and helping their partner insurers in
advance pricing simulation.
Online Distribution Channels

Online distribution channels are changing the insurance distribution
landscape in India. Insurers and distributors now focus on providing
a self-service platform through online modes which assist in
delivering a superior consumer experience and making information
sharing cost-efficient and transparent. The online insurance market
consists of direct online sales by insurance companies and online
sales by insurance distributors. In India, the online insurance market
is highly underpenetrated with 1.0% of total premium sold online in
FY20 as compared to 13.3% in USA and 5.5% in China in 2020.
Further, of this market, digital insurance marketplace occupy 54.3%
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share in total online insurance market in 2020. Going forward, share

of online insurance is expected to improve significantly due to rapid
digital adoption.
Digital insurance marketplace is playing a key role in distribution of

insurance products in India. In FY20, Policybazaar was India’s largest
digital insurance marketplace with 93.4% market share in terms of
the number of policies sold. Also, 65.3% of all digital insurance sales
in India in FY20 happened through Policybazaar.
Figure 19: Online insurance as a % of total premium (2020)

Online insurance as a % of total premium (2020)
14% 13.3%
12%
10%
8%
5.5%
6%
4%
2% 1.0%
0%
India China USA
1. FY20 for India

Models of Digital Insurance Distribution
i) Online insurance distribution model: This model focuses on

aggregation of demand. It is fully digital and unassisted and provides
consumers an end-to-end online experience. In this model,
consumers can search for insurance products online from various
insurers, compare and buy policies and manage them digitally.
ii) SAAS for agent aggregation (SFAA): In this model, SFAA

players onboard individual agents on their digital platform to interact
with consumers and sell partner insurers products. These agents
collate the data and upload it on digital platforms, helping insurers to
issue policies digitally. While this model helps educate the
consumers, there is a limited digital experience for them and no data
insights for insurers apart from policy application details. Currently,
the SAAS model assists in pilot testing and impact assessment of
new technologies such as mobile and social media channels, thereby
helping in designing comprehensive strategies around new
platform/channel development. In India, while the online insurance
distribution model exists for some protection products, a hybrid
model with call center executives calling to aid is also prevalent.
Covid-19 Impact on India Insurance Industry

The Covid-19 pandemic rapidly raised public awareness about both
health risks and the importance of insurance. During 2020-21,
insurers introduced various initiatives to deliver a superior consumer
experience using eKYCs, video calls, AI-assisted tele-calling &
contactless claims servicing, thereby simplifying the onboarding and
claims process. Moreover, consumers who were confined to their
homes during lockdowns welcomed the idea of securing themselves
by purchasing insurance through online channels.
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Figure 20:Premiums in Life and General Insurance – Quarterly trends
Rs. bn, New Business Premium (Life Insurance)

%QoQ Growth rate
Gross Direct Premium (General Insurance)
1,000 7% -15% -13% 1% -24% -16% 53% 47% -8% -15% 32% 10%
800
600
400 754 872
698 646 577 660
200 466 469 493 393 488 536
0
(200)
Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21
Source: IRDAI
At the onset of a surge in the Covid-19 positive cases, India’s

insurance industry found itself digitally unprepared with significant
reliance on physical KYCs and in-person medical checkups, affecting
the consumer acquisition process and resulting in a 24% fall in new
business premiums for life insurance and a 16% fall in gross direct
premium for non-life insurance in Q1FY21.
In Q2FY21, life insurance industry saw a 53% QoQ jump in new

business premiums with eKYCs adoption and consumers push
towards life insurance products to cover themselves and their
families from the risk of loss of life in pandemic. The non-life
insurance industry also saw a 47% QoQ increase in gross direct
premiums in Q2FY21, driven majorly by increased awareness about
health protection policies. While health was an outlier in the non-life
insurance space, motor insurance continued dismal performance in
Q2FY21 due to poor auto sales and restrictions on road travel.
Indian economy started opening up in Q3FY21 after lockdowns.

Consequently, situation worsened again in Q4FY21 at the onset of
2nd wave of Covid-19 pandemic in India. This brought back the
consumers’ fear for loss of life and led to a sharp rise in investment
towards insurance products. As a result, there was a quarterly jump
of 32% in new business premiums of life insurance in Q4FY21,
wiping out all losses in life insurance premiums for 2020.
Consumer lending Industry in India

India’s consumer lending market was Rs32.8tn (US$437bn) strong in
terms of outstanding credit balance at the end of FY20. Despite the
large market size, India’s consumer lending penetration in FY20,
measured in terms of outstanding consumer debt as % of nominal
GDP, is considered relatively low at 16.7% compared with 79.2% in
the US & 55.6% in China. The low consumer lending penetration in
India is majorly due to inadequate financial literacy amongst the
borrowers, the limited reach of lending institutions in tier 3 cities and
rural India, low creditworthiness and lack of credit history of
borrowers, and traditional consumer mind set of remaining debt-
free.
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Figure 21: Consumer credit market in India(1) Figure 22: Under-penetration in consumer lending market
Outstanding loan balance (Rs. tn)
100 Oustanding loan balance as a % of nominal GDP (2020)
78.1
80 100%
10.0 79.2%
60 49.0 8.0 80%
7.3 55.6%
32.8 60%
40 3.3 44.1
5.8
1.4 29.5 40%
20 16.7%
20.4
15.9 20%
0 5.1 8.9
2020 2025ii 2030ii 0%
Personal Home Credit Card Other Consumer India China USA
Loans Loans Loans Durable Loans
(1) FY20 for India. Includes year end outstanding balance of personal loans, credit card loans, home loans, education loans, auto loans and
consumer durable loans. Excludes loan against property (LAP)
India’s consumer lending market is expected to witness 9.1% CAGR,

reaching Rs78.1tn (US$1,041bn) in outstanding balance by FY30,
driven by improving financial literacy, growing discretionary
spending, evolving consumer behaviour to avail credit to fund
regular expenses, wider reach of lending institutions, digitization by
incumbents including KYC & application processes, entry of new age
tech lending players and aggregators increasing reach and
favourable regulatory push to improve lending process.
Figure 23: Consumer lending penetration, 2020

Consumer lending penetration, 2020 India USA China
Credit card lending as % of GDP(1) 0.5% 14.7% 51.9%
Number of credit cards as % of population(2) 4.5% 137.3% 54.1%
Housing credit outstanding as % of GDP(3) 10.4% 57.8% 41.2%
(1) FY20 for India. (2) FY2021 for India. (3) Excludes loans against property (LAP)
India’s personal loan market is expected to reach Rs13.3tn

(US$177bn) in disbursal by FY30.
Personal loans help consumers fund any shortfall in their
discretionary expenses or medical emergencies. India had a Rs5.1tn
(US$69bn) personal loan market in terms of outstanding credit
balance at the end of FY2020. In terms of outstanding credit balance
to GDP ratio, India’s personal loan penetration stood at 2.6% in
2020. Additionally, in 2020, disbursal in India’s personal loans
market reached Rs3.6tn (US$48bn).
There is a noteworthy change in Indian consumers’ credit behaviour

away from obtaining credit for large one-time expenses such as
weddings or medical needs, towards financing regular purchases.
This shift has resulted in rising demand of small ticket size personal
loans, which is largely unmet for new-to-credit consumers. Rising
per capita income in India is also expected to boost discretionary
spending in organized retail market, leading to more demand for
consumer credit. Moreover, digitization of KYCs, mobile app-based
loan application process, and automated credit decision making
reduce the time between loan application and disbursal, apart from
improving service quality, leading to growth in personal loans
lending in India. Furthermore, schemes such as ‘Buy now, pay later’,
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which provides convenient and faster form of financing for retail

purchases and targeted towards millennials who do not have a credit
card, is expected to contribute to personal loans penetration.
The credit card market in India is expected to grow at 23.3%

p.a. to reach Rs8tn (US$106bn) in disbursal by FY30.
With only 62mn credit cards in FY20, India’s credit card market is
still in the nascent stages. India’s credit card industry size was Rs1tn
(US$13bn) in terms of gross lending in FY20. Despite being next to
only China in terms of the number of debit cards issued, India has
very low credit card penetration, which stands at only 4.5% when
compared with 137.3% in USA & 54.1% in China in FY21.
Faster adoption of e-commerce by tech-savvy population in India is

helping in improving awareness about credit card benefits. Various
schemes such as ‘Interest-free EMIs’ offered by merchants, ‘Reward
points’ and credit card related cashbacks and discounts are expected
to result in more credit card sales in India. Further, consumers’
preference towards convenience and ease of doing transactions over
cost factors is expected to drive India’s credit card acceptability.
Figure 24: Personal Loan Market – India Figure 25: Credit Card Market – India
Disbursal in Personal Loans - India Disbursal in Credit Cards - India

Rs. tn, CAGR Rs. tn, CAGR
14 13.3 9 8.0
12 8
7
10 6
8 6.8 5 3.5
6 4
4 3.6 3
2 1.0
2 1
0 0
2020 2025ii 2030ii 2020 2025ii 2030ii
India’s housing credit market is expected to reach Rs44.1tn

(US$588bn) in outstanding loan balance by FY30.
In FY20, India had very low housing credit penetration in terms of
the outstanding housing loan as % of GDP, which stood at only
10.4% when compared with 57.8% in USA & 41.2% in China.
Figure 26:Housing Credit Market - India
Outstanding Housing Credit - India (Rs. tn, CAGR)

50 44.1
40
29.6
30
20.3
20
10
0
2020 2025ii 2030ii
Note: Excludes Loan against property (LAP)

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Credit Scoring in lending Industry

Credit score is considered a vital indicator of creditworthiness or
financial health of an individual. Lenders evaluate the credit score
before giving credit to observe the borrowers’ ability to repay the
loan, understand their credit risk profile, and decide on the loan
amount and interest rate applicable.
Traditionally, factors such as income level, amount of existing debt,

number of active credit accounts, guarantees and collateral value,
historical payment performance such as default information and
payments in arrears, amounts owed, length of credit history, new
credit, and types of credit are considered for computing the credit
score. With the rising adoption of technology in consumer lending,
behavioural data such as psychometric test scores and social media
insights are also used in credit score computation.
Presently, there is very low awareness about credit score in India

with ~300mn people in India with a credit score, representing only
~22% of the total population. The process of getting credit scores is
highly time-consuming in India. It takes up to 20 business days to
get the credit report in case of offline application and at least a day
in case of online application with the credit bureaus, with each report
(including credit score) costing Rs399-550.
Role of technology in consumer lending

Technology companies are helping address various challenges in
lending industry such as difficulty in comparing products and offers
from multiple lenders and determining the best suited offer/lender,
information asymmetry and lack of transparency about eligibility and
costs, lack of expert advice and end-to-end assistance, cumbersome
loan processes involving paper-heavy documentation which leads to
higher application processing time. Technology companies are
adding value across the entire consumer lending chain by providing
wider consumer reach, increasing convenience, digitizing the credit
scoring process, introducing innovations to improve cost efficiency,
and preventing frauds with AI & reducing system downtimes.
Figure 27: Digital consumer lending as a % of total consumer lending

Disbursals(1) 2020 India USA China
Total consumer lending market (USDbn) 180 (Rs13.5tn) 6,104 8,885
Total digital consumer lending market (USDbn) 39 (Rs2.9tn) 3,358 2,270
As a % of total disbursals (%) 21.8% 55.0% 25.6%
(1) FY20 for India. Includes disbursal of personal loans, credit card loans, home loans, education
loans, auto loans and consume durable loans. Excludes loan against property (LAP)
Indian consumer lending industry recovering from pandemic
Covid-19 pandemic impacted the consumer lending industry both

structurally and cyclically. The pandemic introduced long-term
changes in consumer behaviour by shifting demand from aspirational
& want-based credit to cautious need-based credit. On the other
hand, the pandemic also influenced the immediate consumer
spending with travel restrictions and lockdowns, making consumers
cutting down expenses on dining, luxury acquisitions, and other
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indulgences. Also, salary reductions and fear of job losses pushed

consumers for smaller ticket size loans, for emergencies or
immediate financing requirements.
The pandemic created a liquidity crunch with NBFCs struggling with

high credit losses and lack of new capital raise from securitization,
on the supply side. Tighter underwriting of loans by lenders resulted
in low approval rates. Additionally, lack of digital preparedness in the
lending industry, with physical KYCs and paper-based loan
application process, significantly impacted the consumer acquisition
process, resulting in more than 60% yoy fall in loan inquiry volumes
across personal loans, credit cards, and home loans in Q1FY21.
To benefit the consumer lending market meaningfully, RBI injected

INR Rs4.2tn liquidity via CRR reduction, long term repo operations
and marginal standing facility. Government of India also announced
loan moratorium and Rs13tn fiscal stimulus to help India recover
from the Covid-19 induced financial risks. Further, faced with low
credit demand, lenders improved the loan disbursal process by
making it quick, seamless, and filled with better convenience, using
eKYCs, mobile-app based online loan application process, digital
scoring and responsive consumer care facilities. PSU banks started
offering personal loans at attractive rates for consumers facing
financial hardships, leading to growth in personal loans inquiry
volumes Q2FY21 onwards. Also, credit cards inquiry volumes
improved in Q3FY21, almost reaching one year before levels, due to
a rise in spending options after the economy re-opening from the
covid-19 lockdowns. Similarly, home loan situation improved after
lockdowns, with inquires increasing in Q2FY21 and registering 4.8%
YoY growth in FY21. This growth was driven by pent-up demand,
reduced interest rates, and attractive payment schemes, leading to
many people refinancing their loans at lower interest rates.
Figure 28: Inquiry volumes for consumer lending in India bottomed out in Q1FY21
due to Covid-19 impact and are on a recovery path since then
Inquiry Volume (in mn), % QoQ growth rate

3% 5% 2% 6% (1%) (1%) (56%) (78%) (73%) 133% 114% 189% 9% 33% 25% 10% (3%) 2%
14.7 14.6
9.8 9.8 9.8
7.7 9.2 9.6 9.0
6.9
2.9 3.1 3.2 3.2 3.5 3.9
1.4 2.7
Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21

Home Loans Personal Loans Credit Cards
PBFL0351
PB Fintech
Financial Analysis
PB Fintech registered revenues of Rs8,867mn in FY21, a growth of
15% YoY, with an EBITDA1 loss of Rs1,598mn. Revenue from
Insurance Web Aggregator Services increased to Rs6,069mn (68%
of revenues) in FY21, a growth of 17.6% YoY, driven by higher
insurance commissions and higher outsourcing services fees that
they earned from their insurer partners. Number of insurance
policies sold on their platform increased from 5.9mn in FY20 to
7.2mn in FY21. Other Services consists of online marketing,
consulting and support services provided largely to the financial
service industry by Paisabazaar and service provided by the
company and its group entities. Revenue from other services
increased to Rs2,797mn in FY21, a growth of 9.5% YoY, driven by
increase in revenue from online marketing services which was
partially offset by decrease in Paisabazaar revenues.
COVID-19, government mandated lockdowns and RBI moratorium on

loan interest payments impacted Paisabazaar’s revenues significantly
in the first two quarters of FY21. While there was some recovery in
the third and fourth quarters of FY21, the loan disbursals sold by
lending partners on Paisabazaar decreased to Rs29,168mn in FY21
from Rs65,496mn in FY20.
Figure 29: PB Fintech Operating Revenue and EBITDA trend Figure 30: PB Fintech - Contribution profit/margin
Rs.mn Revenue Adjusted EBITDA Contribution Profit(LHS) Contribution Margin(RHS)

10,000
6,000 50%
8,000 39.8%
5,000 40%
6,000
4,000 8,867 4,000
7,713 30%
2,000 4,922 3,000
13.7% 20%
0 2,000
8.6% 3,530
(615) 10%
(2,000) 1,000
(2,855) (3,032) 1,053
(4,000) 422
FY19A FY20A FY21A 0 0%
FY19 FY20 FY21
Note: Adjusted EBITDA excludes other income and share based (1) Contribution profit is a non-GAAP financial measure calculated as
payment expense revenue from operations less operating costs (employee benefit
Source: Company expenses) and consumer acquisition costs (advertising and
promotion expenses but excluding brand spends)
(2) Contribution margin is the percentage margin derived by dividing
contribution profit by revenue from operations
Source: Company
Lower advertising and promotion expenses lead to lower

EBITDA loss in FY21
PB Fintech’s major expenses relate to consumer acquisition and

servicing which include: (i) employee benefit expense; and (ii)
advertising and promotion expense. The other expenses relating to
enabling services include: (i) network and internet expenses; (ii)
depreciation and amortisation expense; and (iii) other expenses.
1
EBITDA is calculated as restated loss for the year before tax expense, finance cost,
depreciation & amortisation and other income as per the restated financial statements
PBFL0351
PB Fintech
Employee benefit expense which is the largest cost item for the
company stood at 62.5% of FY21 revenues, a growth of 6% YoY. The
increase was driven primarily due to an increase in its employee
share-based payment expense on account of additional grants of
options in FY21 vs. FY20, partially offset by a decline in number of
employees to 7,310 as of March 31, 2021 from 9,301 as of March
31, 2020
Advertising and promotion expenses which is the second largest cost

item for the company stood at 41.5% of FY21 revenues, declining by
17% YoY. The decline was driven by reduced advertisement
expenses relating to Paisabazaar as a result of constraints on lending
partners due to the impact of COVID-19 in FY21.
Network, internet and other expenses stood at 14.0% of FY21

revenues, flat YoY as increase in expenses related to enabling work-
from-home for employees during COVID-19 was offset by decrease
in travel and office costs. Depreciation and amortisation expense
stood at 4.7% of FY21 revenues, declining by 12.5% YoY. The
decline was driven by decrease in the total number of outstanding
office leases in FY21 from FY20. In FY21, the company reduced the
number of physical offices and renegotiated the lease rentals for
many of its offices to address the impact of COVID-19.
Figure 31: FY20 Result of Operations (Rs. mn.) Figure 32: FY21 Result of Operations (Rs. mn.)
9,000 10,000
7,713 5,209 8,867 5,540
7,000 8,000
5,000 6,000
3,000 4,452 4,000 3,678
1,000 2,000
- -
-1,000 0
-3,000 -2,000 588
508 657 (1,598)
744 (3,199)
-5,000 -4,000
Revenue EBE Advt. Internet Other EBITDA Revenue EBE Advt. Internet Other EBITDA
Expense Expense Expense Expense Expense Expense
1. Employee Benefit Expense (EBE) 1. Employee Benefit Expense (EBE)
2. Advertising and Promotion Expenses (Advt. Expense) 2. Advertising and Promotion Expenses (Advt. Expense)
3. Network and Internet Expenses (Internet Expense) 3. Network and Internet Expenses (Internet Expense)
Source: Company Source: Company
Revenue and cost drivers
1. Ability to attract new consumers to its platforms

The number of unique visits to PB Fintech’s websites and mobile
sites has increased steadily over the last few years with over
126.5mn annual visits to Policybazaar in FY21. Registered consumers
exceeded 48mn on Policybazaar, of which 9.6mn unique consumers
purchased over 19mn policies from its insurer partners in FY21. The
strength of the brands are reflected in the fact that in FY21, 83.0%
of the premium sourced for Policybazaar’s insurer partners and
66.0% of loans originated on Paisabazaar were through consumers
who came to its platforms directly or through direct online brand
searches.
PBFL0351
PB Fintech
Paisabazaar is widely used to access credit scores, with cumulatively

more than 21mn consumers having accessed their credit score
through Paisabazaar as of March 31, 2021. Over 40% of the
disbursals in the last three Fiscal years, including 67% of the
disbursals in FY21 on Paisabazaar were to existing consumers, most
of whom were acquired by Paisabazaar using the free credit score
facility.
2. Relationship with insurer and lending partners

PB Fintech believes its long-term revenue growth is correlated with
its ability to acquire and retain insurer and lending partners on its
platforms. As of March 31, 2021, 51 insurer partners sold their
products on Policybazaar, representing 87.9% of all licensed insurers
in India, while Paisabazaar had 54 partnerships with large banks,
large NBFCs and fintech lenders.
In FY21, Policybazaar originated premium of Rs27,429mn for its

insurer partners from new insurance policies and a total premium of
Rs47,013mn including renewals. Renewals represented 41.7% of its
originated premium in FY21. The number of insurance policies sold
on Policybazaar has grown consistently from 3.0mn in FY19 to 7.2
mn in FY21.
One of the key drivers of Paisabazaar’s revenues is the number and

value of loans disbursed on its platform and the commission it makes
on it. During FY19, FY20 and FY21, Paisabazaar enabled disbursals of
Rs51,015mn, Rs65,496mn, and Rs29,168mn, respectively. As a
result of the ongoing COVID-19 pandemic and government
mandated lockdowns and RBI moratorium on loan interest
payments, Paisabazaar’s revenues were significantly reduced in FY21
due to constraints on its lending partners. While Paisabazaar’s
revenues have recovered to some extent towards the end of FY21
due to high demand despite the COVID-19 pandemic, there
continues to be constraints on lending partners, such as lack of more
flexible KYC requirements which have direct negative impact on the
on-boarding process, and as a result on its revenue.
Figure 33: Policybazaar – Number of Policies sold on the Figure 34: Policybazaar – Premium sourced for Insurer
platform has grown consistently Partners from new policies and renewals
No. of policies (mn) Total Premium (Rs. mn)
8 25.8% 29.8% 41.7%

50,000 CAGR: 42% 47,013
6 40,000 37,586
CAGR: 55% 19,584
30,000 11,182
23,154
4 20,000 5,967
7.2 26,404 27,429
10,000 17,187
2 0
3.0
FY19 FY20 FY21
0
FY19 FY21 New Business Premium Premium from Renewals
% Renewal Premium as a % of Total Premium
Source: Company Note: Total Premium Includes premium from new policies sold during
the year through Policybazaar and renewals premiums from
life and non-life insurance
Source: Company
PBFL0351
PB Fintech
Figure 35: Paisabazaar – Annual disbursal Figure 36: Paisabazaar – Quarterly disbursals
Disbursals (Rs. mn) Disbursals (Rs. mn)

65,496 20,000 64% Recovery
70,000 18,217
15,986 in Disbursals
60,000
51,015 15,000 12,744
50,000
9,938
40,000 10,000
29,168
30,000 5,388
20,000 5,000
1,097
10,000
0
0 Q3 FY20Q4 FY20Q1 FY21Q2 FY21Q3 FY21Q4 FY21
FY19 FY20 FY21
Note: Annual disbursals includes total value of loans disbursed during Note: Quarterly disbursals includes total value of loans disbursed
the year by lending partners through Paisabazaar and does not include during the quarter by lending partners through Paisabazaar and does
credit limit for credit cards sourced through Paisabazaar not include credit limit for credit cards sourced through Paisabazaar
Source: Company Source: Company
3. Ability to retain consumers

Given the strong value proposition the company offers to its
consumers, and the nature of many insurance products, such as
health and motor insurance where renewals are common, it is also
able to benefit from long term retention and visibility of business
from existing consumers with negligible marginal costs. For example,
as of March 31, 2021, consumers who purchased health insurance
through Policybazaar in FY14 for the first time, made repeated health
insurance purchases worth 5.9 times the 2014 premium. The similar
multiplier for motor insurance is 3.4 times. During FY19, FY20 and
FY21, 42%, 60% and 67%, respectively, of disbursals enabled by
Paisabazaar were to existing Consumers.
This provides clear visibility into the company’s future business

outlook as it is able to generate revenue from a consumer over a
long time period with negligible additional spend towards consumer
acquisition leading to superior unit economics. The charts below
reflect the indexed growth in premium originated on Policybazaar for
its insurer partners from health insurance and motor insurance, with
each cohort representing Consumers who purchased their first
insurance product through its platform in a given fiscal year.
Figure 37: Consumer Cohort of Total Premium from Health Insurance

FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 Total
FY14 1.0x 0.7x 0.7x 0.7x 0.7x 0.7x 0.7x 0.7x 5.9x
FY15 1.0x 0.6x 0.7x 0.7x 0.7x 0.6x 0.7x 5.0x
FY16 1.0x 0.7x 0.7x 0.7x 0.7x 0.7x 4.5x
FY17 1.0x 0.7x 0.7x 0.7x 0.7x 3.8x
FY18 1.0x 0.6x 0.7x 0.8x 3.1x
FY19 1.0x 0.6x 0.7x 2.2x
FY20 1.0x 0.6x 1.6x
FY21 1.0x 1.0x
Note: Represents premium and excludes premium from any add on products indexed as 1.0 in
the first year of the cohort
Source: Company
PBFL0351
PB Fintech
Figure 38: Consumer Cohort of Total Premium from Motor Insurance

FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 Total
FY14 1.0x 0.5x 0.4x 0.3x 0.3x 0.3x 0.3x 0.3x 3.4x
FY15 1.0x 0.5x 0.4x 0.4x 0.4x 0.3x 0.3x 3.4x
FY16 1.0x 0.6x 0.5x 0.4x 0.4x 0.3x 3.2x
FY17 1.0x 0.6x 0.5x 0.4x 0.3x 2.8x
FY18 1.0x 0.5x 0.4x 0.4x 2.3x
FY19 1.0x 0.6x 0.4x 2.2x
FY20 1.0x 0.6x 1.6x
FY21 1.0x 1.0x
Note: Represents premium and excludes premium from any add on products indexed as 1.0 in
the first year of the cohort
Source: Company
4. Costs and profitability

PB Fintech’s profitability depends on the cost effectiveness of its
business. In the last three years, it has been able to reduce its
expenses as a percentage of its revenue from operations from 176%
in FY19 to 149.2% in FY20 and further to 124% in FY21. The
company believes that it has significant operating leverage in its
operations, and as it grows it expects to stabilize its fixed expenses,
improve employee efficiency and improve its profitability.
The company’s technology solutions are focused on automation and

self-service driven consumer experience requiring minimal human
intervention. In FY21, 3.7mn policies representing 80.4% of the new
policies sold through Policybazaar were sold with minimal human
assistance. This has resulted in a steady increase in total premium
per advisor (which includes its call centre employees who directly
communicate with the consumers) over the last three fiscal years,
leading to significant cost efficiencies for the company.
Advertising and promotion expenses are major expenses to help

acquire and retain consumers. Through its Consumer-centric
approach, it has created strong brands in both Policybazaar and
Paisabazaar which are recognised throughout India and which has
helped it reduce its advertising and promotion expenses. Its
advertising and promotion expenses as a percentage of its revenue
from operations reduced from 70.3 % in FY19 to 41.5% in FY21.
As a result of improvement in these costs, the company has been

able to improve its Contribution Profit and Contribution Margin. It
uses Contribution Margin as a key metric in evaluating its operating
performance and believes it is a useful measure as it takes into
consideration the direct costs of operating of businesses. Its
Contribution Margin increased from 8.6% in FY19 to 39.8% in FY21.
PBFL0351
PB Fintech
Figure 39: Policybazaar - Steady increase in total premium per Figure 40: PB Fintech – Contribution Profit and Margin
advisor over the last 3 FYs
Total Premium per advisor (Rs. mn) Rs. mn,
15 14.1 FY19 FY20 FY21
2.3x except percentages (%)
10 8.5 8.2 Revenue from Operations 4,922 7,713 8,867

6.3 6.0
4.6 Employee Benefit Expense 2,431 3,479 3,091
5
Advertising and Promotion
0 2,069 3,181 2,246
Expenses
FY19 FY20 FY21
Total Premium/Advisor Contribution Profit(1) 422 1,053 3,530
New Business Premium/Advisor
Contribution Margin(2) 8.6% 13.7% 39.8%
Source: Company (1) Employee benefit expense relates to expenses for call center
operations which helps in acquiring and retaining consumers
(2) Advertising and promotion expenses relates to online marketing
expenses which includes cost of search engine marketing and
other online digital marketing
(3) Contribution profit is a non-GAAP financial measure. The
company defines Contribution profit as revenue from operations
less operating costs (employee benefit expenses) and consumer
acquisition costs (advertising and promotion expenses but
excluding brand spends)
(4) Contribution margin is the percentage margin derived by dividing
contribution profit by revenue from operations
Source: Company
Figure 41:Result of Operations for FY19 to FY21

Y/e 31 Mar, Consolidated FY19A FY20A FY21A
(Rs. mn) Rs. % Rs. % Rs. %
Revenue from Operations 4,922 100% 7,713 100% 8,867 100%
Growth (%) na 57% 15%
Insurance Web
3,103 63% 5,159 67% 6,069 68%
Aggregator Services
Growth (%) na 66% 18%
Other Services 1,819 37% 2,554 33% 2,797 32%
Growth (%) Na 40% 10%
Other Income 366 7% 843 11% 708 8%
Total Income 5,288 107% 8,556 111% 9,574 108%
Expenses:
Employee Benefit Expense 3,976 81% 5,208 68% 5,540 63%
Depreciation and Amortisation
304 6% 473 6% 414 5%
expense
Advertising and Promotion
3,459 70% 4,452 58% 3,678 42%
expense
Network and Internet expense 317 6% 508 7% 588 7%
Other expenses 531 11% 744 10% 657 7%
Finance costs 75 2% 119 2% 115 1%
Total expenses 8,662 176% 11,504 149% 10,993 124%
Restated loss before tax (3,374) -69% (2,948) -38% (1,419) -16%
Total tax expense 94 2% 92 1% 83 1%
Restated loss for the year (3,468) -71% (3,040) -39% (1,502) -17%
Source: Company, IIFL Research
PBFL0351
PB Fintech
Strengths
Created strong, consumer-friendly brands offering wide
choice, transparency and convenience
PB Fintech offers wide choice, transparency and the ability for
consumers to research and access insurance and personal credit
products offered by its insurer and lending partners. Through its
consumer-centric approach, it has created strong brands in both
Policybazaar and Paisabazaar which are recognised throughout India.
As per Frost & Sullivan, Policybazaar is a household name for
insurance and is one of the most trusted insurance brands in India.
The strength of its brands is also reflected in the fact that in FY21,
83.0% of the policies sold on Policybazaar and 66.0% of loans
originated on Paisabazaar were to consumers who came to its
platform directly or through direct online brand searches.
Proprietary technology, data and intelligence stack

PB Fintech’s proprietary technology stack helps it design user-
friendly consumer journeys across all of its processes by automating
various aspects across the product value chain. Using its technology,
it engages with consumers through easy-to-navigate mobile apps
and websites which automate and digitise the consumer journey of
purchasing insurance and personal credit products, and provide high
quality consumer service. Policybazaar applies voice analytics and
behavioural insights of consumers, based on its browsing activities,
time taken to fill forms, queries asked and many other activities,
enabling it to detect fraud at the time of purchase and when filing
claims. This enables its insurer partners to have better risk selection
and pricing for insurance products, which has resulted in significantly
higher quality financial and operating results through Policybazaar.
Similarly, Paisabazaar has also been strengthening its infrastructure
and capabilities to facilitate end-to-end digital processes for loans
and credit cards. It has been working with its lending partners and is
deeply focused on digitising each leg of the process from application
to documentation, income validation, setting up repayment mandate
and e-signing of the agreement. This provides a seamless and
convenient experience to consumers and also brings in efficiency and
better turn-around times for lenders.
Collaborative partner for insurer and lending partners

PB Fintech provides its insurer and lending partners with access to
the large consumer bases of both Policybazaar and Paisabazaar to
enhance their sales. Using its data insights, its insurer and lending
partners are able to target the right consumers for their products. As
per Frost & Sullivan, the consumer acquisition cost for its insurer and
lending partners is one of the lowest through its platforms. The
company leverages its technology and insights to improve its risk
assessment models, fraud detection and underwriting capabilities. It
also works with them to help create customised products to address
the needs of consumers and market gaps.
Scale gives the company unique self-reinforcing flywheels

and strong network effects
Policybazaar and Paisabazaar have large, efficient and intelligent
networks, providing consumers with the ability to browse financial
services products offered by 51 insurer partners and 54 lending
partners. The company benefits from powerful network effects at
scale as a result of its positioning as a trusted and default search
engine for insurance and personal credit products in India. With
PBFL0351
PB Fintech
every new consumer, insurer and lending partner, financial services

product and transaction on its platforms, the data insights and
intelligence of its network continues to improve, helping its partners
to offer customised products to consumers with superior unit
economics and more accurate risk assessment capabilities, leading
to better financial and operating results. This gives the ability to offer
better prices to consumers, driving higher consumer satisfaction and
retention, which further accelerates its network effects.
High renewal rates provide clear visibility into future business

and deliver superior economics
Given the strong value proposition PB Fintech offers to its
consumers, and the nature of many insurance products, such as
health and motor insurance where renewals are common, it is able
to benefit from long term retention and visibility of business from
existing consumers with negligible marginal CAC. For example, as of
March 31, 2021, consumers who purchased health insurance through
Policybazaar in FY14 for the first time have made repeated health
insurance purchases worth 5.9 times the 2014 premium. Similarly,
the multiplier is 3.4 times for motor insurance. This provides visibility
into its future business outlook as it is able to generate revenue from
a consumer over a long time period with negligible additional spend
towards consumer acquisition leading to superior unit economics.
Benefits from economies of segmentation

Policybazaar and Paisabazaar serve consumers with varied needs,
credit profiles, demographics, employment types and income levels.
The company systematically segments consumers into different
cohorts based on their needs and disclosures, such as the insurance
proposal questionnaire, medical declarations, family and lifestyle
history, income and credit score to ensure higher accuracy of
product offers. For Paisabazaar, it also aims to build customised
lending solutions for different consumer segments. Its micro-
segmentation has helped grow the product offerings on its platforms,
streamline transaction processes, deepen partnerships with partners,
and offer tailor-made financial services solutions for varied
segments. Its ability to identify and address a wide range of
segments increases the number of products sold on its platform
through providing consumers with more personalised and
appropriate product offers, which in turn increases its business. The
company believes that with the rich data that it generates, it has a
significant competitive advantage over individual financial services
providers.
Capital efficient model with low operating costs

As PB Fintech aggregates and distributes insurance and personal
credit products offered by insurers and lenders and does not create
its own products, it does not carry any corresponding underwriting or
credit risks. Further, as its brand continues to grow stronger, a
larger percentage of users will use its platform directly or without
marketing costs. As its platform and consumer cohorts continue to
develop, it expects a larger proportion of consumers to buy either
unassisted or with reduced levels of assistance, which should
increase its capital and operational efficiency.
PBFL0351
PB Fintech
Strategies
Broaden and deepen consumer reach in India
Policybazaar strives to deepen engagement with its consumers to
meet all their insurance requirements (including protection against
death, disease and damage) through cross-sell and up-sell,
improving consumer retention and reducing consumer acquisition
costs. It plans to expand its presence through offline channels by
leveraging its recently approved direct (life and general) insurance
broker license. The company aims to provide in-person consumer
engagement and services in local languages through its offline retail
offices across India. As of July 15, 2021, it has already set up 15
physical offices and it intends to develop up to 200 physical retail
outlets across all city tiers in India by the end of FY24. These outlets
will serve as experience centres for consumers and provide them
with the comfort of a local physical presence to help resolve any
queries or service requests. Further, leveraging its broker license, it
will now also be able to provide its existing and new consumers on-
ground claims support. These physical retail outlets are currently
intended to be small offices located within each city and near the
offices of its insurer partners. It plans to follow a hub and spoke
structure, wherein it will hire one regional manager for every five
designated regions. Further, it also plans on developing a network of
point-of-sale-persons across strategic locations in India. This will
give more opportunities to micro-market specific product categories
and influence consumers at an earlier point in the sales process. For
Paisabazaar, a key focus area is to continuously engage with its large
consumer base acquired through the free credit score platform.
Paisabazaar, strives to deepen consumer engagement and boost
loyalty to become the destination of choice for consumers for their
credit solutions.
Expand its playbook and replicate platform for SME and

corporate clients
PB Fintech has built a proven, scaled and capital efficient business
model targeting retail consumers across insurance and credit. It
plans to leverage its execution capabilities, expertise in the Indian
financial services sector and relationships with insurer and lending
partners to continue to design and offer products for SME and
corporate clients. The company facilitates digital quotations to
corporate consumers for their employees’ insurance requirements,
which would otherwise be a lengthy process, and allow for digital
purchasing and servicing. Its goal is to develop high quality servicing
for corporate employees with a high degree of platform-based
flexibility to manage their policies, along with integrated wellness
and OPD offerings.
Continue to invest in the company’s brands

PB Fintech has created strong consumer brands with both
Policybazaar and Paisabazaar that it believes deeply signify trust and
its consumer recall. The company will continue to invest in its brand
building activities to educate consumers about insurance and
personal credit needs and increase its brand awareness while
maintaining its proposition of neutral advice. Its approach is to
invest in historically successful mediums such as television, while
also expanding its marketing presence to capture shifts in
consumers’ media consumption habits, such as in social media,
digital media and embedded advertisements.
PBFL0351
PB Fintech
Neo-lending strategy to cover innovation and segment gaps

PB Fintech aims to co-create and design innovative products to
address evolving consumer needs, enable underserved segments to
access credit, build lifetime engagement with consumers and create
annuity revenue streams. These products would be targeted to large
credit-starved segments, across geographies and income levels, and
helping them meet unfulfilled credit needs. As PB Fintech would
control the design of the products and processes, its endeavour
would be to provide an unmatched consumer experience. This will
also allow them to collect large amount of data related to usage and
behaviour, which will provide insights to innovate further.
Continue to invest in digital and technology infrastructure

PB Fintech’s technology infrastructure and data analytical capabilities
form the foundation of solving core issues for all its stakeholders,
namely consumers, insurer partners and lending partners. The
company will continue to invest in its platforms to ensure a seamless
experience packed with convenience, speed and choices for its
consumers, while providing finer data insights to its insurer partners
and lending partners to further improve their service delivery. It
plans to use data analytics extensively to help consumers with more
personalised recommendations and an intuitive and effective
experience. Identifying consumer needs accurately, factoring in their
life-stage along with new-age features like image recognition, voice
analytics and language processing would help the company manage
its back-end operations efficiently, providing robust systems.
Pursue strategic investments and acquisitions to enhance
product and service capabilities
PB Fintech intends to pursue strategic investments and acquisitions
which are complementary to its business to enhance product and
service capabilities, which will help it scale faster. The company aims
to enhance its service capabilities both internally and externally
through investments in the health and wellness segments that can
offer better consumer claims and purchase experiences. For
example, in May 2021, it entered into a non-binding term sheet in
relation to the acquisition of a company that offers an integrated
health-tech platform to corporates for employee health benefits
management and is engaged in connecting certified doctors,
counsellors and coaches to individuals through its web and mobile
applications. It provides access to health care services by
disseminating healthcare information and data to its consumers
through the website, mobile application and arranges for the
provision of health care services to its users.
Pursue international expansions
PB Fintech has begun to expand in the Middle East with operations in
Dubai, and it plans to scale up its operations and brand presence in
Dubai and in the broader Gulf Cooperation Council (“GCC”) region by
investing in creating a strong brand, building a robust team to cater
to the prospective consumers and in its operational capacity
including through investments to develop technology and related
infrastructure to service consumers in these geographies. The
company may pursue similar opportunities in select Southeast Asian
countries by replicating its proven business model in India along with
exploring inorganic growth opportunities. It also intends on building
a team of experienced engineers and support staff in these regions
who would work on building and maintaining its technology
infrastructure. Apart from technology, it intends to invest in physical
infrastructure, communication infrastructure, employee cost and
support cost incurred on facilities used by employees and consumer.
PBFL0351
PB Fintech
Risks
 PB Fintech’s future growth prospects depend on its ability to
attract new consumers and to generate new purchases
from existing consumers. To do this, it must stay abreast of
emerging consumer preferences and product trends that will
appeal to existing and potential consumers. For its consumers,
Policybazaar and Paisabazaar make recommendations of
insurance and credit products respectively based on their needs.
However, there is no assurance that it’s insurer and lending
Partners will offer all of their products and services on its
platforms, or that the insurance and credit products and services
will cater to the needs of potential or existing consumers.
 Relationship with insurer and lending partners are crucial

for PB Fintech’s success. In particular, due to the nature of life
insurance policies and the established brand reputation of a few
major life insurance providers, the company depends to a certain
extent on their cooperation to offer attractive life insurance
products on its platform. Its four largest partners in terms of
contribution to its revenues from operations accounted for
32.81%, 35.11% and 30.82% of its total revenue from
operations for FY21, FY20 and FY19, respectively. While the
company continually seeks to diversify its partners, there can be
no assurance that the concentration will not decrease or further
increase. Its arrangements with its partners are typically not
exclusive, and they may have similar or more favourable
arrangements with its competitors.
 Policybazaar received a certificate of registration to act as a

direct insurance broker (life and general) under the IRDAI
(Insurance Brokers) Regulations, 2018 (the “Insurance Brokers
Regulations”) on June 10, 2021, prior to which it was registered
as a web aggregator under the IRDAI (Insurance Web
Aggregators) Regulations, 2017. Previously, as a web
aggregator, Policybazaar had entered into arrangements with
various insurers in order to provide web aggregator services.
These agreements imposed several conditions on Policybazaar
including obligations pertaining to confidentiality, notifying the
insurer upon occurrence of certain events, obtain necessary
licenses and approvals. While the company is in the process of
amending its agreements with insurer partners to cover the
extended offline and point of sales person scope available
to insurance brokers, there can be no guarantee that it
will be able to amend the agreements on terms favourable to
it, or at all, and any such failure may have an adverse impact on
its revenue and results of operations.
 The online independent fintech industries in India that

Policybazaar and Paisabazaar operate in are intensely
competitive, enabled by growing digitization of India, shifting
governance structures from paper dependent to cloud based,
better credit evaluation due to digital consolidation of information
and India’s millennials driving digital adoption. Its current or
potential competitors include (i) other online independent
insurance and credit product and service platforms, (ii) traditional
offline insurance and credit companies and intermediaries, (iii)
online direct sales channels of large insurance and financial
companies, (iv) other digital and fintech companies and
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PB Fintech
ecosystems operating in India that have commenced insurance

and credit distribution businesses, and (v) other online insurance
and credit tech companies. New competitors may emerge too.
 Policybazaar’s insurance broking business is subject certain

laws, regulations and licensing requirements, many of which may
be more stringent on an insurance broker than an insurance web
aggregator. If the company is unable to comply with any such
regulatory requirements, its business and results of operations
may be materially and adversely affected. Additionally, the costs
of compliance may be high, which may affect its profitability.
 The performance of PB Fintech’s IT systems is critical to its

success. Its systems may experience service interruptions or
degradation or other performance problems because of hardware
and software malfunctions, unexpected high transaction volumes,
distributed denial-of-service and other cyber-attacks,
infrastructure changes, power losses, telecommunications
services disruption, unauthorised access, fraud, military or
political conflicts, terrorist attacks, legal or regulatory takedowns,
phishing, viruses, ransomware, malware or other events.
 PB Fintech’s platform stores and processes certain personal,

transactional, financial and other sensitive data provided by
consumers, and, pursuant to its privacy policy, the company
makes certain personal information provided by consumers or
third party data providers available to insurer and lending
partners in order to carry out its obligations under arrangements.
Accordingly, the company faces inherent risks in handling large
volumes of data and in protecting the security of such data.
 PB Fintech derives revenues primarily from commissions and

other fees paid by the insurer and lending partners whose
insurance and credit products its consumers purchase on its
platforms. The fee rates are set by insurer and lending partners
or negotiated between insurer and lending partners and the
company. Commissions, other fee rates and premiums can
change based on the prevailing economic, regulatory, taxation
and competitive factors that affect its insurer partners. Any
decrease in commissions or other fee rates may significantly
affect its results of operations.
 PB Fintech currently relies on third-party vendors to provide

payment processing services, including the processing of
payments from credit cards and debit cards. Hence its business
would be disrupted if these vendors become unwilling or unable
to provide these services to the company and the company is
unable to find a suitable replacement on a timely basis.
 Currently, PB Fintech has operations in Dubai and it plans to

scale up its operations and brand presence in Dubai and in the
broader Gulf Cooperation Council (“GCC”) region as well as
South-East Asian countries, by investing in creating a strong
brand and developing technology and related infrastructure, to
cater to prospective consumers. Its international operations
may expose the company to legal, tax and regulatory
requirements and violations or unfavourable interpretations of
these regulations by the respective authorities could harm the
company’s business.
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PB Fintech
Figure 42: Board of directors

Name Designation Profile
He holds a bachelor’s degree in technology from Indian Institute of Technology, Delhi, a post-
Chairman, graduate diploma in management from Indian Institute of Management, Ahmedabad and a
Yashish
Executive master’s degree in business administration from Institut Européen d'Administration des Affaires
Dahiya
Director and CEO (INSEAD), France. He was previously associated with ITW Signode India Limited, Bain & Company
Inc. (London), eBookers PLC (UK) and CI2I Investments Limited.
He holds a bachelor’s degree in technology from Shri Shahu Ji Maharaj University, Kanpur and a
post-graduate diploma in management from Indian Institute of Management, Calcutta. He was
Whole-time
Alok Bansal previously associated with Voltas Limited, General Electric International Operations Co. Inc.
Director and CFO
(India), iGate Global Solutions Limited, Mahindra and Mahindra Limited and FE Global Technology
Services Private Limited.
She holds a bachelor’s degree in business management from Bangalore University and a post-
Kitty Non-executive graduate diploma in agri-business management from Indian Institute of Management,
Agarwal Director* Ahmedabad. She is currently associated with Info Edge Ventures as a partner and was previously
associated with Info Edge (India) Limited as head of corporate development.
President - He holds an integrated master’s degree in mathematics and computer applications from Indian
Polcybazaar and Institute of Technology, Delhi and a post-graduate diploma in management from Indian Institute
Sarbvir Singh
Non-executive of Management, Ahmedabad. He has previously served as Managing Partner of WaterBridge
Director** Capital Management LLP and as Managing Director of Capital18, part of the Network18 group.
Munish He has completed his master’s in business administration from Cornell University. He currently
Non-executive
Ravinder serves as a managing partner at SoftBank Investment Advisers. He was also associated with
Director***
Varma Deutsche Bank AG.
He is a fellow member of the Institute of Chartered Accountants of India with over 25 years of
experience. He is a co-founder of Thought Arbitrage Research Institute, an independent not-for-
profit research think tank working in areas of corporate governance, public policy and
Kaushik Independent
sustainability. He was also associated with Price Waterhouse & Co., Chartered Accountants LLP,
Dutta Director
and Lovelock & Lewes, Chartered Accountants as Partner for over 25 years. He has been retained
as an expert on corporate governance by the Indian Institute of Corporate Affairs of the Ministry
of Corporate Affairs in matters relating to future of corporate governance in India.
She holds a bachelor’s degree in economics from the University of Delhi, a post graduate diploma
in business administration from the Indian Institute of Management, Ahmedabad and has
completed the strategic leadership for microfinance course at Harvard Business School. She is the
founder of Swadhaar FinServe Private Limited (now a subsidiary of RBL Bank Limited and known
Veena Vikas Independent as RBL FinServe Limited), a non-executive director on the board of RBL Bank Limited and a
Mankar Director founder and director of Swadhaar FinAccess. Ms. Mankar started her career with ICICI Limited
and has worked with various financial institutions including West LB Group (Singapore) and FIM
Bank (Malta). She has also served as a director on the board of Liberty General Insurance Limited
and as the non-executive chairperson of IDFC Bank Limited (now known as IDFC First Bank
Limited).
She holds a bachelor’s degree in engineering from Bharathidasan University and a post-graduate
diploma in management from Indian Institute of Management, Calcutta. She is the founder and
Lilian Jessie Independent
CEO of Paul Writer Strategic Services and is the author of a book titled ‘No Money Marketing’,
Paul Director
published by Tata McGraw-Hill. She has previously been associated with Tata Elxsi (India) Limited,
Ogilvy & Mather Limited, Infosys Limited, iGATE Global Solutions and Wipro Limited.
He holds a bachelor’s degree in commerce and a master’s degree in commerce from Nagpur
Nilesh University and is a certified associate with the Indian Institute of Bankers. He has served as
Independent
Bhaskar whole-time member, IRDAI and as the CEO and Director of LIC Nomura Mutual Fund Asset
Director
Sathe Management Company and as zonal manager (Northern Zone) of Life Insurance Corporation of
India.
He holds a bachelor’s degree in commerce from the University of Madras. He is a member of the
Gopalan Independent Institute of Cost Accountants of India and a fellow of the Federation of Insurance Institutes. He
Srinivasan Director has previously served as the chairman and managing director of United India Insurance Company
Limited and chairman and managing director of the New India Assurance Company Limited.
Source: Company
*Nominee of Makesense Technologies Limited. Makesense Technologies Limited which is being amalgamated into the Company.
**Nominee of the Founders. ***Nominee of SVF
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PB Fintech
Figure 43: Key Managerial Personnel

Name Designation Profile
He holds a bachelor’s degree in technology from Indian Institute of Technology, Delhi, a post-
Chairman, graduate diploma in management from Indian Institute of Management, Ahmedabad and a
Yashish
Executive master’s degree in business administration from Institut Européen d'Administration des Affaires
Dahiya
Director and CEO (INSEAD), France. He was previously associated with ITW Signode India Limited, Bain & Company
Inc. (London), eBookers PLC (UK) and CI2I Investments Limited.
He holds a bachelor’s degree in technology from Shri Shahu Ji Maharaj University, Kanpur and a
post-graduate diploma in management from Indian Institute of Management, Calcutta. He was
Whole-time
Alok Bansal previously associated with Voltas Limited, General Electric International Operations Co. Inc.
Director and CFO
(India), iGate Global Solutions Limited, Mahindra and Mahindra Limited and FE Global
Technology Services Private Limited.
President - He holds an integrated master’s degree in mathematics and computer applications from Indian
Polcybazaar and Institute of Technology, Delhi and a post-graduate diploma in management from Indian Institute
Sarbvir Singh
Non-executive of Management, Ahmedabad. He has previously served as Managing Partner of WaterBridge
Director Capital Management LLP and as Managing Director of Capital18, part of the Network18 group.
He was associated with the Company from February 3, 2014 to March 31, 2016, and thereafter has
been associated with Paisabazaar since April 1, 2016. He holds a bachelor’s degree in engineering
Naveen Co-founder and
from University of Delhi and a post-graduate diploma in management from Indian Institute of
Kukreja CEO Paisabazaar
Management, Kolkata. He was previously associated with Citibank N.A. (India), Capital One (Europe)
Plc and Aviva Life Insurance Company India Limited.
He has been associated with Policybazaar since November 18, 2019. He holds a master of
management studies degree from Birla Institute of Technology and Science, Pilani and a post-graduate
Sharat Dhall COO Policybazaar diploma in business management from XLRI, Jamshedpur. He was previously associated with
Hindustan Lever Limited, Times Internet Limited, and Yatra Online Private Limited. He currently also
serves as an advisory council member of Oktober6 Insight Private Limited, India.
He was initially associated with the Company from September 23, 2010 till July 15, 2016 and later
rejoined the Company on February 1, 2019 and is currently associated with Policybazaar as Chief
Chief Technical Technical Officer. He holds a bachelor’s degree of technology from Indian Institute of Technology,
Saurabh
Officer Kanpur, and a master’s degree in technology from National University of Singapore and has completed
Tiwari
Policybazaar an executive programme in business management from Indian Institute of Management, Calcutta. He
was previously associated with myMBSC.com Ptd. Ltd. (Singapore), IBM India Private Limited and GEP
Solutions Private Limited.
He was associated with the Company since August 28, 2008 till November 30, 2014, and thereafter
Director of Finance has been associated with Policybazaar since December 1, 2014. He holds a bachelor’s degree in
Manoj and Principal commerce from Kurukshetra University, has qualified as a chartered accountant with the Institute of
Sharma Officer, Chartered Accountants of India and has also qualified as an associate with the Insurance Institute of
Policybazaar India. He was previously associated with Fiamm Minda Automotive Limited, Ericsson India Private
Limited and FE Global Technology Services Private Limited.
She has been associated with the Company since February 10, 2020. She holds a bachelor’s degree in
commerce and a bachelor’s degree in law from University of Delhi and has qualified as a company
Deepti Group Head, Legal secretary with the Institute of Company Secretaries of India. She was previously associated with Vaish
Rustagi and Compliance Associates Advocates, Canara HSBC Oriental Bank of Commerce Life Insurance Company Limited,
Aviva Life Insurance Company India Limited and Apollo Munich Health Insurance Company Limited
where she served as senior vice president – legal, compliance and corporate affairs.
He initially joined Policybazaar on June 1, 2017 and thereafter has been associated with the Company
Company
since April 2, 2019. He has completed his bachelor’s degree in commerce and bachelor’s degree in law
Bhasker Joshi Secretary and
from Kumaun University, Nainital and is a member of the Institute of Company Secretaries of India. He
Compliance Officer
was previously associated with A2Z Infraservices Limited.
Source: Company
PBFL0351
PB Fintech
PB Fintech – Major events and milestones

Figure 44: PB Fintech – Major events and milestones
Calendar Year Details
2008 Incorporation of the Company
2008 Investment of US$4mn by Info Edge in the Company
2010 Commencement of health insurance related activities
2012 Registeration of one of the subsidiaries of the Company as an insurance web aggregator with the IRDAI
2015 Registration of Paisabazaar as an investment advisor with SEBI
2018 Built an in-house actuarial analytics team in respect of retail customer sales
2018 Reached the US$1bn valuation mark with Series F investment
2018 Commencement of operations in United Arab Emirates by PFFL
2021 Registration of Policybazaar as an insurance broker with IRDAI
Source: Company
PBFL0351
PB Fintech
Financial summary
Income statement summary (Rs. mn)
Revenue 4,922 7,713 8,867
EBITDA (3,361) (3,199) (1,598)
Depreciation & amortisation (304) (473) (414)
EBIT (3,665) (3,672) (2,012)
Other income 366 843 708
Financial expense (75) (119) (115)
Loss before tax (3,374) (2,948) (1,419)
Exceptional items - - -
Reported Loss before tax (3,374) (2,948) (1,419)
Tax expense (94) (92) (83)
Loss for the year (3,468) (3,040) (1,502)
Note: EBITDA and EBIT has been calculated excluding other income
Balance sheet summary (Rs. mn)

Cash & cash equivalents 3,926 11,076 19,479
Inventories - - -
Receivables 1,313 1,788 1,729
Other current assets 159 245 187
Creditors 1,110 1,179 1,019
Other current liabilities 762 851 1,190
Net current assets 3,525 11,079 19,185
Fixed assets 1,169 1,416 1,212
Intangibles 20 57 36
Long term Investments - - 1
Other long-term assets 928 1,177 664
Total net assets 5,642 13,729 21,098
Borrowings - - -
Other long-term liabilities 739 1,071 1,180
Minority Interest - - -
Net worth 4,903 12,658 19,917
Total liabilities 5,642 13,729 21,098
PBFL0351
PB Fintech
Cash flow summary (Rs. mn)

PBT (3,374) (2,948) (1,419)
Tax (paid) / Refund, net (353) (392) 485
Depreciation and amortisation 304 473 414
Net working capital change 330 (243) 394
Other operating items - - -
Operating cash flow before interest (3,092) (3,109) (126)
Financial expense 75 119 115
Non-operating income 196 (650) 298
Operating cash flow after interest (2,821) (3,640) 287
Capital expenditure (351) (325) (48)
Long-term investments 5,591 1,927 (1,075)
Others (1,487) (832) (10,895)
Free cash flow 932 (2,853) (11,730)
Proceeds from issue of shares 0 10,594 7,809
Lease payments (234) (281) (221)
Dividend - - -
Net chg in cash and cash equivalents 698 7,460 (4,142)
PBFL0351
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NOTES
PBFL0351
PB Fintech
Disclosure : Published in 2021, © IIFL Securities Limited (Formerly ‘India Infoline Limited’) 2021
India Infoline Group (hereinafter referred as IIFL) is engaged in diversified financial services business including equity broking, DP services, merchant
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PBFL0351
PB Fintech
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Key to our recommendation structure
BUY - Stock expected to give a return 10%+ more than average return on a debt instrument over a 1-year horizon.
SELL - Stock expected to give a return 10%+ below the average return on a debt instrument over a 1-year horizon.
Add - Stock expected to give a return 0-10% over the average return on a debt instrument over a 1-year horizon.
Reduce - Stock expected to give a return 0-10% below the average return on a debt instrument over a 1-year horizon.
Distribution of Ratings: Out of 177 stocks rated in the IIFL coverage universe, 86 have BUY ratings, 9 have SELL ratings, 41 have ADD ratings,
and 41 have REDUCE ratings.
Price Target: Unless otherwise stated in the text of this report, target prices in this report are based on either a discounted cash flow valuation or
comparison of valuation ratios with companies seen by the analyst as comparable or a combination of the two methods. The result of this
fundamental valuation is adjusted to reflect the analyst’s views on the likely course of investor sentiment. Whichever valuation method is used there
is a significant risk that the target price will not be achieved within the expected timeframe. Risk factors include unforeseen changes in competitive
pressures or in the level of demand for the company’s products. Such demand variations may result from changes in technology, in the overall level
of economic activity or, in some cases, in fashion. Valuations may also be affected by changes in taxation, in exchange rates and, in certain
industries, in regulations. Investment in overseas markets and instruments such as ADRs can result in increased risk from factors such as exchange
rates, exchange controls, taxation, and political and social conditions. This discussion of valuation methods and risk factors is not comprehensive –
further information is available upon request.
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Detailed
report
India - Auto India - Strategy RBL Bank BUY India - Life Insurance Institutional Equities
India - Steel Institutional Equities
Institutional Equities
CMP Rs675 All set to scale-up

Target 12m Rs800 (18%) RBL Bank (RBK) is likely to witness a sustained increase in
Market cap (US$ m) 4,144 scale and profitability for the next few years and graduate
into a large-size private bank. A well-set management team,
Bloomberg RBK IN clearly articulated strategies, focus on sectors with high
Sector Banking & Fin growth potential, ability to acquire adequate deposits and

access to equity capital are key ingredients that will aid such

growth. Improving revenue intensity, both fee-based and
18 April 2019
fund-based, will be RoA drivers over FY19-22ii. We estimate a
52Wk High/Low (Rs) 692/438 30% balance sheet CAGR, 34% EPS CAGR and a ~27bps RoA
Shares o/s (m) 426 expansion to ~1.5% over FY19-22ii. We value RBK at 2.8x
Daily volume (US$ m) 18 FY21ii BVPS post-money (implied 22.7x EPS), attributing the
Dividend yield FY20ii (%) 0.5 high multiple to high growth and improvement in profitability.
Free float (%) 100.0
Right focus to drive strong balance sheet growth: RBK can
Shareholding pattern (%) deliver 35% Cagr in loans and 32% in deposits over FY19-22ii. Loan
Promoters 0.0 growth would be driven by the credit cards, MFI and SME/MSME
Pledged (as % of promoter share) 0.0 segments within retail banking. Within wholesale banking, large
FII 18.8 client acquisitions and deepening relationships will drive growth.
DII 21.3 Deposits would be driven by branch expansion and focus on

improving the productivity of existing branches.
Price performance (%)
1M 3M 1Y
RBL Bank 6.1 18.6 32.4
Several levers for RoA improvement: Over FY19-22ii, RoA
Absolute (US$) 4.6 21.4 25.5 expansion would be driven by an increase in the mix of credit cards
Rel. to Sensex 3.2 11.0 18.6 and MFI to ~25% of loans as well as better operating efficiencies and
CAGR (%) 3 yrs 5 yrs lower credit costs in both businesses. Other segments are likely to
EPS 31.1 42.9 see better revenue intensity, led by higher fees and faster re-pricing

in yields. We estimate revenues to contribute ~35bps to RoA, with
Stock movement expenses and credit costs partially offsetting this impact. Overall, we
Vol('000, LHS) Price (Rs., RHS)
estimate ~27bps RoA expansion over FY19-22ii.
40,000 800
30,000 600
Valuations reflecting higher growth, improving profitability:
20,000 400 We value RBK at 2.8x FY21ii BVPS (22.7x EPS) or Rs800/share. We
10,000 200 have assumed a ~Rs35bn capital infusion in FY20ii in our estimates.
0 0 The high valuation is based on the high growth potential, given a
Nov‐17
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supportive operating environment, strong execution, outlook of

improving profitability and its well-regarded management team. High

dependence on credit-cards/MFI and challenges in raising adequate
Return on Assets (%)
(%)
liabilities would be key risks to our call.
1.6 1.5
1.4 1.3
1.4 Financial summary (Rs bn)
1.2
1.2
1.1 Y/e 31 Mar, Parent FY18A FY19A FY20ii FY21ii FY22ii
1.0 Pre prov. operating inc. (Rs bn) 13.3 19.4 26.0 35.1 47.8
0.8
0.6 Pre‐exceptional PAT (Rs bn) 6.4 8.7 12.3 16.8 23.3
0.4 Reported PAT (Rs bn) 6.4 8.7 12.3 16.8 23.3
0.2
0.0
Pre‐exceptional EPS (Rs) 15.1 20.3 25.7 35.2 48.7
FY18 FY19 FY20ii FY21ii FY22ii Growth (%) 27.5 34.1 26.5 37.2 38.3
Source: Company IIFL Research
IIFL vs consensus (%) (5.8) (1.2) NA

Abhishek Murarka PER (x) 44.6 33.3 26.3 19.2 13.9

abhishek.murarka@iiflcap.com Book value (Rs) 159 177 256 287 330
91 22 4646 4645 PB (x) 4.2 3.8 2.6 2.4 2.0
Gearing up for recovery Uphill trek Consolidating & Expanding

4Q2019 4Q2019 Arash Arethna

arash.arethna@iiflcap.com
CAR (%)
ROA (%)
15.3
1.1
13.5
1.2
15.1
1.3
12.6
1.4
10.7
1.5 Moving on in Life 1Q2019 3Q2018
91 22 4646 4655

ROE (%) 11.5 12.2 12.4 13.0 15.8
Source: Company, IIFL Research. Price as at close of business on 18 April 2019.
Current headwinds more cyclical, less structural Resetting our Expectations (RoE) www.iiflcap.com
1 From ‘Save’ to ‘Protect’ Growing volumes amid a conducive cycle
Detailed
India - FMCG India - Pharma India - Cement

report
Institutional Equities Institutional Equities Institutional Equities

Biocon BUY India - Oil & Gas Institutional Equities
Dairy Products CMP Rs533

The dark horse in biosimilars
Target 12m Rs700 (31%)
Market cap (US$ m) 4,996
Biocon-Mylan has established its credentials as a leading
Enterprise value (US$ m) 5,086
biosimilar player in the global markets, with the partnership
Bloomberg BIOS IN
having already received approval for Trastuzumab in US. We
Sector Pharma

expect 2018 to be a year of approvals for Biocon-Mylan with

4-5 approvals coming up this year across US and EU. Addition
17 January 2018
of US/EU revenues from the first wave of biosimilars could
52Wk High/Low (Rs) 564/295 potentially help Biocon’s profits to grow ~6x over the next
Shares o/s (m) 600 five years. Biocon has also resolved its manufacturing issues,
Daily volume (US$ m) 25 while growth in Syngene will continue to pick up. Maintain
Dividend yield FY18ii (%) 0.9 BUY with an upgraded TP of Rs700.
Free float (%) 39.3
Clear runway for bagging regulated market approvals for the
Shareholding pattern (%) first wave of biosimilars; potential to quintuple profits in five
Promoter 60.7 years: Biocon has continued to surprise us positively as it worked
FII 15.4 toward putting together pieces for biosimilar approvals in the US/EU.
DII 3.8 With Trastuzumab approval being the first in class, Biocon-Mylan has
Others 20.1 established its credentials as a leading biosimilar player in the global

Price performance (%) markets. With 4-5 approvals coming up this year, we expect 2018 to
1M 3M 1Y be a year of approvals for Biocon-Mylan. These approvals will provide
Biocon 2.3 42.2 60.3 further visibility to earnings and continue to de-risk the business.
Absolute (US$) 2.3 43.7 70.9 Addition of US/EU revenues from the first wave of biosimilars would
Rel. to Sensex (1.6) 35.7 32.9 help Biocon’s profits to grow ~6x over the next five years.
CAGR (%) 3 yrs 5 yrs Strong execution aided by tailwinds: Biocon overcame
EPS 14.1 12.7 compliance challenges of USFDA inspections in April and June 2017

Stock movement rather quickly. Pegfilgrastim (Neulasta) started as a competitive

Vol('000, LHS) Price (Rs., RHS) product. However, competition has whittled down further to only two
60,000 600 projects looking at near-term approval. Insulin Glargine (Lantus) is
also expected to remain a low-competition product in the foreseeable
40,000 400 future, due to requirements of a dedicated manufacturing facility.
20,000 200
Syngene back on track after an incidence of fire: About 20% of
0 0 Syngene’s business suffered due to a fire at one of its facilities in late
FY17. However, the company regained lost ground, reflected in strong
Jan‐16
Mar‐16
May‐16
Jul‐16
Sep‐16
Nov‐16
Jan‐17
Mar‐17
May‐17
Jul‐17
Sep‐17
Nov‐17
Jan‐18
growth in recent quarters. Syngene remains an important value driver

MH 06 2018
IND

for Biocon. We believe that foray into large-scale manufacturing, client
Strong earnings visibility from FY20ii accretion in biology, and maturing of newly added dedicated centres
Revenue (USD mn) (LHS) are long-term growth drivers for Syngene, which would help it register
Ebitda margins (RHS)
1,600 40% ~20% revenue growth over the next five years.
1,400 35%
Financial summary (Rs m)
1,200 30%
1,000 25% Y/e 31 Mar, Consolidated FY16A FY17A FY18ii FY19ii FY20ii
800 20% Revenues (Rs m) 33,372 38,763 39,049 45,868 74,311
600 15%
400 10% Ebitda margins (%) 22.3 24.5 20.0 22.0 37.5
200 5% Pre‐exceptional PAT (Rs m) 4,021 6,121 3,360 4,340 15,663
0 0%
Reported PAT (Rs m) 5,504 6,121 3,360 4,340 15,663
FY18ii
FY19ii
FY20ii
FY21ii
FY17

Source: Company IIFL Research
Growth (%) 0.1 52.2 (45.1) 29.1 260.9

Dr Abhishek Sharma IIFL vs consensus (%) (29.4) (41.9) 63.6

abhishek.sharma@iiflcap.com PER (x) 79.6 52.3 95.2 73.7 20.4
91 22 4646 4668 ROE (%) 11.0 13.8 6.9 8.7 27.8

The rise and rise of private dairies India formulations market Producers bitten by the capacity bug 2Q2018 High octane acceleration
Rahul Jeewani Net debt/equity (x) 0.0 0.0 0.0 0.1 0.1
3Q2018 3Q2018 rahul.jeewani@iiflcap.com EV/Ebitda (x) 43.4 34.2 41.8 32.7 11.9 4Q2017
91 22 4646 4673
Price/book (x) 7.4 6.1 5.9 5.8 4.6
www.iiflcap.com Source: Company, IIFL Research. Price as at close of business on 16 January 2018.
Milk the opportunity Source of sustainable cash generation Price deflation will cause earnings to flatline 1 Changing landscape of fuel retailing
Detailed
report
Motherson Sumi BUY India - NBFC Institutional Equities

CMP Rs353 A behemoth in the making

Target 12m Rs450 (28%)
Market cap (US$ m) 11,350 Motherson has grown into a USD7.3bn global auto parts
major, helped by sound operating and financial principles. We
Enterprise value (US$ m) 11,855 believe a good mix of businesses with steady growth
Bloomberg MSS IN (standalone, SMR) and turnaround potential (SMP, PKC)
Sector Auto would drive 28% EPS Cagr over FY17-20. Motherson is a

turnaround specialist with a highly credible history of value
creation through acquisitions. Motherson’s FY20 revenue

14 November 2017
target of USD18bn entails acquisitions of USD6.2bn that
52Wk High/Low (Rs) 374/185 would result in EPS accretion and offer sizeable upside risk.
Shares o/s (m) 2105
A global giant built on sound operating/financial principles:
Daily volume (US$ m) 14
Starting out as a wiring harness (WH) supplier to Maruti in 1986,
Dividend yield FY18ii (%) 0.7
Motherson has grown to become the WH leader in India, the leader
Free float (%) 36.9

in CV WH globally, the second largest auto mirror maker globally,
Shareholding pattern (%) and a leading global supplier of plastic auto components.
Promoter 63.1 Motherson’s growth has been supported by sound operating/financial
FII 19.7 principles: i) focus on quality, costs, ROCE; ii) increasing content per
DII 6.8 car to drive growth; iii) backward integration to increase value-
Others 10.4 addition, cost/competitive advantage; and iv) making acquisitions
with customer buy-ins, which significantly protects the downside.
Price performance (%)
Mix of businesses with steady growth and turnaround
1M 3M 1Y potential to drive 28% EPS Cagr: Motherson’s standalone
Motherson (0.8) 9.1 75.5 operations (WH) and its subsidiary SMR (mirrors) are well established,
Absolute (US$) (1.5) 7.6 81.5 in terms of market standing, margins, and return ratios. We forecast
Rel. to Sensex (2.6) 3.3 52.3 mid-to-high-teen earnings growth in standalone (led by volume and
CAGR (%) 3 yrs 5 yrs value) and SMR (led by market share gain, slight margin expansion).
EPS 28.0 36.1 On the other hand, SMP (plastics) and PKC (CV WH) are operating at

low margins (sub-2% net margin) and return ratios. We forecast
Stock movement 220bp/400bp Ebitda margin expansion for SMP/PKC by FY20. This
Vol('000, LHS) Price (Rs., RHS)
would result in multi-fold rise in earnings of these two subsidiaries.
40,000 400
History of value creation through acquisitions offers sizeable
30,000 300
upside risk: Motherson’s stock is up ~19x in the past 10 years. We
20,000 200
estimate ~40% of these returns have been generated through cheap
10,000 100 acquisitions and their subsequent turnaround. Motherson’s FY20 revenue
0 0 target of USD18bn implies acquisitions of USD6.2bn. Low cost of
Nov‐15
Jan‐16
Mar‐16
May‐16
Jul‐16
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Nov‐16
Jan‐17
Mar‐17
May‐17
Jul‐17
Sep‐17
Nov‐17
borrowing (last debt raise was at 1.8%) and potential turnarounds

should make these acquisitions highly EPS-accretive.
Financial summary (Rs m)
Y/e 31 Mar, Consolidated FY16A FY17A FY18ii FY19ii FY20ii

Revenues (Rs m) 372,163 424,934 564,744 663,081 768,746

Ebitda margins (%) 9.5 10.1 9.7 10.7 11.3

Pre‐exceptional PAT (Rs m) 12,276 16,517 19,259 26,920 35,388

Reported PAT (Rs m) 12,923 15,543 19,259 26,920 35,388


Growth (%) 22.5 30.6 13.3 39.8 31.5

Joseph George IIFL vs consensus (%) (13.9) (9.6) (3.7)

joseph.george@iiflcap.com PER (x) 57.0 43.7 38.6 27.6 21.0
91 22 4646 4667 ROE (%) 31.8 26.1 21.6 25.6 28.0
Net debt/equity (x) 1.0 0.7 0.4 0.2 (0.1)
Suraj Chheda
suraj.chheda@iiflcap.com
EV/Ebitda (x) 29.5 26.0 19.6 15.1 11.8 Choppy waters 4Q2017
91 22 4646 4656 Price/book (x) 15.9 8.7 7.8 6.5 5.4
www.iiflcap.com Source: Company, IIFL Research. Price as at close of business on 13 November 2017.
Adept swimmers pull ahead
1
IIFL - India IIFL - USA

IIFL Securities Limited IIFL Capital Inc.
9th Floor, IIFL Centre, 1120 Avenue of the Americas
Kamala City, Senapati Bapat Marg, Suite 1505,
Lower Parel (W), New York,
Mumbai - 400013 NY 10036
Tel +91-22-4646-4600 Tel +1-212-221-6800
Fax +91-22-4646-4700 Fax +1-646-417-5800

PB Fintech Limited: Corporate Research

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PB Fintech Limited: Corporate Research

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PBFL0351

CORPORATE RESEARCH Largest digital insurance and credit marketplace

Rs. mn Revenue Adjusted EBITDA Revenue Insurance Web Aggregator Services

PB Fintech launched Policybazaar, its flagship product, in 2008 to

In 2014, PB Fintech launched Paisabazaar with the goal to transform

PB Fintech has an asset-light capital strategy and does not

platform offerings address the large and highly underpenetrated

Policybazaar offers consumers an information-rich, user-friendly, and

Policybazaar provides their insurer partners access to its large

Figure 3: Key elements of Policybazaar’s functionality

Figure 4: Online consumer Trends (India, China and USA)

Policybazaar is one of the most trusted insurance brands in India,

 Consumer-friendly, research and needs driven platform:

 Service and responsiveness: According to F&S, the insurance

 Convenience of transactions: Policybazaar believes that the

Benefits to insurer partners

Insurer partners use Policybazaar’s large consumer base, technology

 High quality consumer base with lower consumer

 Accurate risk assessment and better Underwriting

 Technology integrations: Policybazaar’s open architecture is

Figure 5: Pictorial guide of the consumer experience on Policybazaar app

Partner 1 97.9% ₹ 1,396

Partner 2 99.1% ₹ 1,398

Partner 3 99.2% ₹ 1,277

NCB Super Premium

#2: Paisabazaar platform

Paisabazaar business model is based on resolving fundamental

• challenges in comparing products and offers from multiple

Paisabazaar’s algorithm-based technology platform provides

Paisabazaar helps consumers to become more credit aware. It runs

 Easy access to credit: Paisabazaar’s algorithm-based

Benefits to lending partners

 Operational efficiency and reduced acquisition costs: By

partners achieve operational efficiencies and stronger

 Exclusive innovative products for untapped segments: As a

Figure 6: Pictorial guide of the consumer experience on Paisabazaar app

Compare Curated Offers Quick Options Menu To Additional Features Like

Compare Credit Card

Apply Now Apply Now

Select another card Select another card

Excellent Very Good

Best Suited For

 Get 50 Reward Points  Get Amazon.in gift card

Figure 7: PB Fintech – Key performance indicators

Employees: PB Fintech had 7,310 full-time employees as of March

Figure 8: PB Fintech – Number of full-time employees

From 2015 to 2020, India also witnessed significant smartphone

India is expected to see a significant jump in internet adoption

Figure 10: Online consumer Trends (India, China and USA)

Improving Financial Literacy in India

 Changing consumer behavior: People in India can now save

physical well-being. This has led to an increased propensity

 Technological advancements: The rapid adoption of the

 Government of India initiatives: Initiatives such as India

Insurance Industry in India

Figure 11: Insurance Industry is expected to grow at a 17.8% CAGR by 2030

India Insurance Market by Total Other Motor Health Life

However, as compared with global peers, India has a highly

71% 70% 61%

50% 55% 54% 48%

Over the last two decades, the penetration of non-life insurance in

Figure 14:Non-life insurance penetration, 2020

In 2018, India’s health expenditure was amongst the lowest globally