Shares of PB Fintech rose nearly 6% in early trade on Friday despite a report claiming that SoftBank would sell half of its stake in the parent company of online insurance broker Policybazaar and loan business Paisabazaar via a block deal today. The floor price of the deal is ₹440 per share, a discount of 4.6% to PB Fintech’s last closing price of ₹461.55 on the BSE. 

SoftBank, which currently holds around a 10% stake in Policybazaar, is looking to sell a 5% share in the company, which would be worth ₹1,000 crore, as per the report. The Japanese investment firm had invested $199 million in Policybazaar, whereas it offloaded stock worth $250 million in its initial public offering (IPO) last year.

The Japan-based SoftBank Group has made a slew of disinvestment in the past few months in the new-age listed companies such as One97 Communications, the parent of digital payments giant Paytm, Delhivery, and Zomato. Last month, it offloaded a 4.5% stake in Paytm for $200 million. It had invested $1.6 billion into the payments solution company over the years.

On Friday, PB Fintech shares opened 4.2% higher at ₹481.10, against the previous closing price of ₹461.55 on the BSE. Extending opening gains, the stock rose as much as 5.9% to hit a high of ₹488.90. Meanwhile, the BSE Sensex was trading 236 points lower at 63,047 levels as investors resorted to profit booking after a strong rally in the last eight consecutive sessions.

PB Fintech has seen stake selling by pre-IPO investors after the lock-in expired on November 10 last month. The foreign institutional investor Tiger Global Management pared nearly 3% shares twice in the company through open market transactions on different days. 

The parent of Policybazaar has underperformed the benchmark index since its listing on November 15, 2021. The stock currently traded 50% lower than its issue price of ₹980, while it dropped 60% as compared to its all-time high of ₹1,470 touched on November 17, 2021. The stock hit its 52-week high of ₹1,234.95 on December 2, 2021, while it touched an all-time low of ₹356.20 on November 17, 2022.

However, PB Fintech shares witnessed a trend reversal in the last one month as investors are buying the dip after the company reported improvement in its financial performance. The stock has risen over 20% in a month, while it has rebounded 37% from its all-time low levels.

For the September quarter of 2022 (Q2 FY23), the financial services company reported a decline in its consolidated net loss to ₹186.5 crore against a loss of ₹204.4 crore in the corresponding quarter of last year and ₹204.3 crore loss in Q1 FY23, driven by growth in the lending business. The operating revenue more than doubled to ₹573.5 crore from ₹279.6 crore in the same quarter last year, while it was up 13.5% from ₹505.18 crore in the June quarter of the current fiscal. The revenue from the core business, including Paisabazaar and Policybazaar, jumped 55% year-on-year (YoY) to ₹410 crore.

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