PB Fintech shares crash 43% in four sessions to hit fresh 52-week low; analysts bearish

Shares of PB Fintech Ltd, the parent company of Policybazaar and Paisabazaar, continued their sharp drop in Tuesday's trade, sliding 6.56 per cent to hit a new 52-week low of Rs 1,076.35. At this level, the stock has cracked 43.05 per cent in four trading days. It is currently trading below its listing price of Rs 1,150 apiece, at which PB Fintech made its market debut in November 2021.

The recent slump comes after the Insurance Regulatory and Development Authority of India (Irdai) released its consultation paper on commissions, Expenses of Management (EoM) and distribution reforms.

The proposed changes could have a bearing on the commission structure for insurance distributors across products.

The company issued a clarification over the stock price movement, stating: "We clarify that the paper is currently at a consultation stage and represents proposed policy changes open for public and stakeholder feedback. It does not constitute a final regulatory order or directive."

It added, "The proposals in the consultation paper cover structural shifts, including proposed adjustments to distribution expense structures and commission limits. Our material subsidiary, Policybazaar, operates as an insurance intermediary dedicated to enhancing financial inclusion and social security across India. Over the past 18 years, the platform has invested substantially in consumer education, digital onboarding, pre-sale advisory, and end-to-end claim assistance for under-penetrated products like Health and Term Insurance. At this stage, the proposed limits in the consultation paper, if implemented in current form, may not fully reflect the current operational and servicing cost structures of the online insurance distribution."

The firm further said, "However, the Company, along with other industry stakeholders, is actively evaluating the comprehensive impact of these proposed changes and remains committed to constructive engagement with the IRDAI. We will be submitting detailed feedback and representations to the IRDAI and relevant authorities during the stipulated consultation timeline."

BSE and NSE have placed PB Fintech under the short-term Additional Surveillance Measure (ASM) framework. Exchanges use the short-term and long-term ASM frameworks to alert investors to unusual price movements and heightened volatility.

Analyst view

Kranthi Bathini, Equity Strategist at WealthMills Securities, said the proposed Irdai norms on commissions could be negative for companies such as PB Fintech. He added that investors with a medium- to short-term view should consider selling on a rise.

From a technical standpoint, Ravi Singh, Chief Research Officer at Master Capital Services, suggested that the counter is appearing weak on charts.