HDFC Mutual Fund has purchased 25 lakh shares of PB Fintech in a bulk deal worth ₹320.6 crore. The acquisition was made at an average price of ₹1,282.30 per share on the National Stock Exchange. The deal came on a day when PB Fintech, the parent of Policybazaar, faced its sharpest fall since listing. The stock plunged 36% in one session, closing at ₹1,244 compared with ₹1,886.30 earlier.
The sudden decline followed a consultation paper from the Insurance Regulatory and Development Authority of India proposing changes in commission structures, expenses of management and sales practices. Analysts believe these proposals could hurt distribution platforms the most. Brokerage Bernstein described the cuts as far more severe than expected and warned that PB Fintech’s unit economics may unravel at the proposed levels, particularly in health and motor insurance.
PB Fintech management assured investors that there will be no mass layoffs or drastic cost reductions. The company plans to moderate hiring and marketing expenses to protect profitability. It expects the current financial year to be a volatile transition period and aims for earnings recovery in the next year. Mutual funds collectively saw an erosion of nearly ₹9,700 crore in PB Fintech holdings due to the 36% fall.