PB Fintech shares fall 4% amid block deal; Tencent Cloud Europe likely seller

Shares of PB Fintech, parent of online insurance broker Policybazaar and loan business Paisabazaar, tumbled nearly 4% in intraday trade on Tuesday amid strong volume due to a block deal. As many as 0.96 lakh shares changed hands in a block deal, but the name of buyers and sellers were not ascertained immediately.

As per report, Tencent Cloud Europe BV was looking to sell 1.2% stake in the company at an average price of ₹1,228 per share, a discount of 1.86% to Monday’s closing price, which would fetch around ₹677 crore to the exchequer.

At the end of March quarter of 2024, Tencent Cloud Europe held a 6.26% stake in the financial technology company. In May last year, the cloud technologies provider had offloaded another 2% shares in Policybazaar's parent firm for ₹562 crore through an open market transaction.

Early today, PB Fintech shares opened lower at ₹1,240 against the previous closing price of ₹1,251.30 on the BSE. During the session so far, the fintech stock declined 3.6% to hit an intraday low of 1205.60, while the market capitalisation slipped to ₹54,406 crore.

The share price of PB Fintech touched its 52-week high of ₹1,400 on April 10, 2024, while it declined to its 52-week low of ₹587.75 on June 2, 2023. The stock has delivered 100% return in the last one year and 47% in six months, while it dropped 2.5% in a month.

In the March quarter of FY24, PB Fintech reported a consolidated net profit of ₹60.19 crore as against a loss of ₹9.34 crore in the year-ago period. The revenue for the quarter stood at ₹1089.57 crore, up 25.36% over ₹869.10 crore in the same period last year. The company’s EBITDA (earnings before interest, tax, depreciation and amortisation) improved from -5% to 4%.

During the quarter under review, the fintech major’s total insurance premium stood at ₹5,127 crore, contributing to an annual recurring revenue (ARR) of ₹20,000 crore in insurance premium. This growth was driven by growth in new health and life insurance businesses.

“Our renewal/trail revenue is at an ARR of ₹577Cr, up from ₹388 Cr last year same quarter. This typically operates at over 85% margins and is a significant source of profit growth,” the company said in its earnings report released on May 7.

“Credit business sees moderation in growth, however continues to be adjusted EBITDA positive since December 2022. We are now at the annualized run rate of ₹14,000 crore credit disbursal and about six lakh credit card issuance on an annualised basis. Our total credit score consumer base now is over 43 million,” the earnings report highlighted.

For FY24, the company witnessed turnaround in its profitability, posting profit of ₹64 crore against a loss of ₹488 crore in the previous fiscal. The operating revenue stood at ₹2,375 crore, up 39% YoY.

(DISCLAIMER: The views and opinions expressed by investment experts on fortuneindia.com are either their own or of their organisations, but not necessarily that of fortuneindia.com and its editorial team. Readers are advised to consult certified experts before taking investment decisions.)