Shares of PB Fintech, the parent of PolicyBazaar, fell a further 7.4% on Friday after dropping 36% on Thursday as investors continued to digest the impact of proposed changes to insurance distribution rules.
The stock rose as much as 4% in early trade before falling to 1,118 rupees on the NSE, Moneycontrol said. The stock Thursday had touched a 52 week low and closed at Rs 1,207.
The sell off followed a discussion paper from the Insurance Regulatory and Development Authority of India suggesting changes to insurance commissions and the economics of distribution. The regulator has proposed product-specific caps on commissions for life, health and motor insurance and tighter caps on expenses for insurers.
Brokerages have flagged the proposals could affect PB Fintech’s earnings. HSBC cut its target price to 1,150 rupees from 2,100 rupees and downgraded the stock to “Hold”. Motilal Oswal said, “The changes could have a significant impact on revenue and earnings.
PB Fintech CEO Yashish Dahiya said the proposed commission structure could bring the company’s general insurance business revenues to between one third and 40% of current levels.
