Online Insurance Market PolicyBazaar, the latest among India Internet companies that go public this year, submit a preliminary document for initial public offering with market regulators on August 2.

IPO Crore RS 6,017 consists of offers for sale by exiting investors worth Rs 2,267.5 Crore and fresh stock by the company worth Rs 3,750 Crore, according to draft red herring prospectus and Indian exchange council.

This is a second company supported by infoedge that will go public, after the successful IPO Zomato in July.

Policybazaar said the current loss and planned fees may be a risk factor, regardless of data violations and any commission changes offered by their partners. See the main risk factors:

Anticipated losses and costs

Like other internet companies such as Zomato and Paytm and Mobikwik who have recently submitted an IPO in July, Polisbazaar said in his DRHP that the company had a history of losses and anticipating increasing costs in the future. However, the company, cut losses to Rs 150 Crore at FY21 from RS 304 Crore at FY20. In FY19, the company made RS 346 Crore losses.

“We expect our costs to increase from time and losses we will continue to remember the expected investment to develop our business. Every failure to increase our income is enough to compensate for our investment and other expenses can prevent us from achieving or increasing positive profitability or cash flows Consistent, “said the company.

Income dependence on partners

Polycbazaar earns income, especially through commissions from third party insurance companies and loan partners. Every change in the commission rate will affect the operation.

“Because we do not specify, and cannot predict, time or level of premium change or costs, we cannot predict the effect of one of these changes owned in our operation. Every decrease in commissions or other fees can significantly affect the results of our operations, “He said at DRHP.

The company also depends on sustainable operation with this business partner. The four biggest partners contributed 32.81 percent of the revenue from operations to FY21 and 35.11 percent on FY21.

“While we continue to try to diversify our partners, there is no guarantee that concentration will not be reduced or increasing,” said the company.

Subsidiaries.

The company’s subsidiary is supervised by regulatory authorities such as Sebi, Bank India’s reserves and, most importantly, the Authority of Indian insurance regulations and development. The company is subject to periodic examinations and thorough tests by regulators. All forms of non-compliance can lead to regulatory actions.

Sebi has issued an administrative warning to its subsidiary Paisabazaar in October 2020 in connection with non-compliance with certain provisions of Sebi Regulations (Investment Advisers), 2013.

“Paisabazaar responded to Sebi, along with the provisions of the information needed,” said the company.

COMPETITION

Polisbaar anticipates competition not only from other online insurance aggregators but also from their own partners and their offline and online sales channels.

“New competitors may appear at any time. Some of our competitors also offer insurance products and their credit on our platforms, so they both compete and work with us, and can stop offering products on our platform at all, which can affect the product mixture on the platform and our sales, “Our company is said. “Our competitors can introduce platforms with more attractive products, content, and features, or services or solutions with competitive prices or improved performance that we cannot match. Some of our competitors may have more resources to develop or obtain new technology and react Faster to change the requirements of consumers and insurance and financial companies. “

The court process

The company reveals that subsidiaries and certain directors are involved in legal processes and every adverse decision against them can withdraw punishment. Four delayed litigations against the company were detailed in DRHP, 105 involving subsidiaries and two directors involving the RS 300 Crore.

The threat of data violations

Policybazaar highlights that failure to protect confidential information, prevent Cybersecurity intelligence and data or improper use or disclosure of the data materially and impact on business. In addition, if a third party insurance company and loan platform failed to maintain data integrity, consumers, businesses and financial conditions companies can be affected.