US-based Capital Group buys additional 6.24% stake in PB Fintech for Rs 2,770 crore

US-based financial services firm Capital Group has brought an additional 6.24 percent stake in PB Fintech, the parent firm of Policybazaar and Paisabazaar, for an estimated Rs 2,270 crore.

The Group, through its investment vehicles SmallCap World Fund Inc and New World Fund Inc, carried out the transaction in small tranches over the last three months via open market.

New World Fund Inc, which previously held 1.67 percent in PB Fintech, bought an additional stake of 4.22 percent (1,90,13,242 shares) for about Rs 1872.16 crore, the latest shareholding data for the March quarter showed.

The New World Fund’s stake now risen to 5.89 percent from 1.67 percent.

Venture capital firm Small Cap World Fund Inc bought 91,22,194 shares or nearly 2.02 percent stake for Rs 898.23 crore, taking the total investment by Capital Group in PB Fintech to Rs 2,770.39 crore.

The group via its two affiliates now holds 7.91 percent stake in the fintech firm.

The net value of the transaction was calculated at Rs 984.6659 a stock, the average price of the scrip from January 1 to March 31.

Incorporating the exit of Temasek Holding (Claymore Investments (Mauritius) Pte. Ltd) on February 1, the overall share of foreign Institutional Investors (FII) in the insurtech firm went up to 48.97 percent from 46.01 percent in the previous quarter.

Temasek Holding sold its entire stake of 5.42 percent in PB Fintech for Rs 2,425 crore on February 1.

Other foreign portfolio investors (FPIs) like Government Pension Fund Global, Wf Asian Smaller Companies Fund and Kotak Funds reduced their stake marginally, while Foreign Direct Investment (FDI) from Steadview Capital Mauritius and Tencent Cloud Europe B.V. remained the same.

Stock rally

At the current market capitalisation of Rs 54,514 crore, the PB Fintech stock has been seeing an uptrend trend since it turned profitable in Q3FY24 when it posted a PAT of Rs 37.2 crore.

The stock hit a 52-week high of Rs 1,400.35 on the NSE on April 10.

The stock has gained over 70 percent this year, outperforming the benchmark Nifty 50 which has risen 4.4 percent during the period. In the last year, the stock has delivered returns of over 130 percent.

Tata Digital India sells entire stake, Axis enters

Domestic institutions pared down their holding to 16.75 percent in the March quarter from 19.05 percent, driven by sale of shares by alternative investment funds (AIFs).

AIFs held 1.80 percent in PB Fintech in the March quarter, down from 4.7 percent the previous quarter.

While Axis Mutual Fund Trustee and Midcap Fund bought 1.7 percent stake, Tata Digital Fund took an exit, selling its entire 1.16 percent holding in the company.

Mutual funds like Franklin and Mirae sold some shares during the January-March period, while Premji Invest, through its affiliate PI Opportunities Fund II, offloaded its entire holding of 1.93 percent.

Recently, the insurance tech player announced a partnership with ICICI Lombard to provide insurance solutions to 1 crore customers, and incorporated a new subsidiary–PB Pay–to conduct the business of payment aggregator.

At 11.19 am, PB Fintech was trading at Rs 1,234.50 on BSE, up 0.58 percent from the previous close.

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