India’s InsurTech Policybazaar Eyes IPO

Policybazaar is gearing up for a $500 million initial public offering (IPO) as the online insurance platform drives a wave of rising demand for coverage from India’s rising middle class.

Policybazaar is looking at September of 2021 for the IPO, Co-Founder Yashish Dahiya told Bloomberg, a move that would value the Indian startup at a hefty $3.5 billion.

In a first step, Policybazaar is pushing ahead with plans to raise another $250 million from investors and is also gearing up to pick two or three lead underwriters for the IPO, with the field of candidates including a number of big Wall Street banks, Bloomberg reported, citing Dahiya, who is CEO of Policybazaar’s corporate parent, ETech Aces Marketing and Consulting.

Softbank Group’s Vision Fund is a top investor in Policybazaar, having recently agreed to pump an additional $130 million into the online insurance platform’s parent company. Other investors include Tencent Holdings and Tiger Capital Management.

The company plans to list only in Mumbai, as current Indian regulations don’t permit dual listings by financial service companies or by companies or in other “sensitive sectors.”

Policybazaar’s drive to expand and go public comes at an opportune time, with the Indian government pushing to extend health and other insurance policies beyond the tiny slice of the population that currently has coverage.

As of 2017, just 3.69 percent of India’s population have insurance coverage, according to the India Brand Equity Foundation. Of the 57 insurance companies in the country, 24 sell life insurance policies and the remaining 33 provide health and other coverage.

However, the industry has grown significantly in recent years in India, with life insurance carriers doing particularly well.

Life insurance companies have seen the premiums they collect from Indian policy holders to more than double over the past eight years, rising from just under $40 billion in 2012 to more than $94 billion in 2020, according to IBEF.