PB Fintech shares crash 48% in six sessions; stock barely holds above IPO price

Shares of PB Fintech Ltd, the parent company of Policybazaar and Paisabazaar, extended their sharp decline on Thursday, falling 9.38 per cent to hit a fresh 52-week low of Rs 965. The stock pared some losses but still settled 7.69 per cent lower at Rs 983 on BSE.

At Thursday's closing price, PB Fintech shares have fallen 47.99 per cent over the past six trading sessions.

The stock is now trading close to its IPO issue price of Rs 980. PB Fintech made its stock market debut five years earlier in November 2021.

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.

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 Insurance Brokers Association of India (IBAI) has raised concerns over the Irdai's proposed reforms to insurance distribution, warning that tighter commission caps and lower expense limits could affect policyholders, employment and insurance growth.

At the centre of the association's concerns are more than 30 proposed commission caps across insurance products and distribution channels, along with a proposed one-third reduction in insurers’ overall expense limit.

IBAI said the proposals could disadvantage customers who voluntarily appoint brokers to compare insurance products, negotiate coverage and assist with claims.

Separately, 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."

The firm also 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."

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.