Policybazaar IPO: SoftBank to sell 20% of its stake worth Rs 1,875 crore

SoftBank will sell around 20 per cent of its total stake in Policybazaar’s initial public offering, the fintech company said today. The Japanese venture fund currently has a 13 per cent stake in the IPO-bound company.

The IPO consists of a fresh issue of Rs 3,750 crore, along with an offer for sale (OFS) of Rs 1959.72 crore by existing promoters and shareholders.Of the total offer for sale, Softbank’s sale is Rs 1,875 crore while individual shareholders will share Rs 85 crore. Policybazaar had initially filed a draft red herring prospectus in July, saying that the offer for sale in the IPO would be Rs 2,267.5 crore--meaning, the OFS amount now is 85 per cent of the initially planned amount.

The company said it will use around Rs 1,500 crore out of the net proceeds to fund marketing initiatives over the next three years.

Further, it intends to use Rs 375 crore to expand the consumer base, including offline presence; Rs 600 crore for strategic acquisitions and investments; Rs 375 crore for expanding presence outside India; and some portion for general corporate purposes. Kotak Mahindra Capital, Morgan Stanley, Citigroup Global Markets India, ICICI Securities, HDFC Bank, IIFL Securities, and Jefferies India are the book running lead managers to the issue.

Founded in 2008 by Yashish Dahiya, Policybazaar boasts of marquee investors like Tiger Global, Softbank, Falcon Edge Capital, Tencent and others.