Financials hammered: Nifty, Sensex slide over 1.5%; PB Fintech melts down 30% on proposed IRDAI overhaul

Indian benchmark indices remained under heavy selling pressure on Thursday, with the Sensex and Nifty falling more than 1%, while financial and insurance stocks bore the brunt of the sell-off. PB Fintech, the parent of Policybazaar, plunged 30% to ₹1,320.10 by 1:41 PM, hitting an 18-month low after investors reacted sharply to the Insurance Regulatory and Development Authority of India's (IRDAI) proposed overhaul of insurance distribution economics.

The 30-share S&P BSE Sensex was down 1,127.78 points or 1.51% at 73,700.97, while the broader Nifty 50 was down 359.10 points or 1.53% at 23,087.70 as of 1:46 pm.

Nifty Bank declined 1.71% while the Nifty Financial Services index fell 2.05%. The broader sell-off was also visible in mid-caps, with the Nifty Midcap Select falling 2.85%.

PB Fintech takes biggest hit

PB Fintech's fall accelerated through the session, with the stock touching ₹1,320.10 from a previous close of ₹1,886.30. The 30% plunge marks a sharp reassessment of the company's distribution economics following IRDAI's consultation paper.

The regulator has proposed product- and channel-specific commission limits, lower renewal commissions, restrictions on incentive structures and tighter Expense of Management limits for insurers. It has also proposed safeguards against compulsory bundling of insurance with loans and changes to the broader distribution architecture.

Insurance distributor Turtlemint Fintech Solutions was also locked in a lower circuit earlier in the session, while insurers and lenders with significant insurance-distribution income came under pressure. PB Fintech and Max Financial Services led losses among distribution-linked stocks, while Axis Bank and other lenders also declined.

Financial stocks drag benchmarks

The pressure was particularly sharp across financials. Bajaj Finance fell 5.20%, HDFC Life 5.16%, Axis Bank 4.71% and Bajaj Finserv 3.94%, according to the latest Nifty data.

The Nifty Private Bank index declined 1.95%, while the Nifty Financial Services 25/50 index fell 1.83%. Financial Services Ex-Bank was down 3.50%, stressing the intensity of selling beyond traditional banks.

Crude, US yields add to pressure

The sector-specific selling came against a weak global backdrop. The US 10-year Treasury yield climbed to around 5.11%, its highest level since 2007, after stronger-than-expected US business activity revived expectations of another Federal Reserve rate hike.

Brent crude also remained above $102 a barrel after jumping nearly 4% in the previous session, adding to concerns over India's import bill, inflation and corporate margins.

The India VIX surged 14.98% to 11.90, indicating heightened expectations of volatility.