PB Fintech, the parent company of Policybazaar, has recently found itself under regulatory scrutiny as its CEO, Yashish Dahiya, received a show cause notice (SCN) from the Securities and Exchange Board of India (SEBI). The notice is in connection to a $2 million investment made by PB Fintech FZ-LLC, Dubai, in YKNP Marketing Management, an outsourced marketing services provider, back in November 2022, acquiring a 26.72% stake.
Regulatory Violations Allegation
The SCN alleges a violation of Clause 4(1) of Schedule B and Regulation 9A(2)(b) of SEBI (Prohibition of Insider Trading) Regulations, 2015. PB Fintech disclosed in an exchange filing that the investment in YKNP Marketing Management was not considered unpublished price-sensitive information (UPSI) due to its perceived “non-material value.”
Company Response and Legal Course
PB Fintech clarified in its filing that the SCN has not caused any significant impact on its financials, operations, or other activities. The company is currently seeking legal advice to address the notice appropriately.
Background of Investment and Partnership
YKNP Marketing Management offers various services, including lead generation and sales outsourcing. PB Fintech’s investment was aimed at leveraging the partnership to gain access to UAE banks and tap into a sales team catering to Arabic customers, enhancing its presence in the UAE market.
Recent Business Developments
The regulatory notice comes amid PB Fintech’s strategic moves to expand its foothold in the UAE market. Last month, the company acquired 100% stake in UAE-based Genesis Group, demonstrating its commitment to growth and diversification.
Financial Performance and Share Transactions
PB Fintech’s consolidated net profit in Q4 FY24 stood at INR 60.2 Crore, marking a significant milestone after achieving profitability in the previous quarter. The company’s operating revenue surged 25% both quarter-on-quarter and year-on-year to INR 1,089.6 Crore in Q4.
Additionally, Yashish Dahiya recently divested 54 lakh shares of the company for INR 715 Crore through open market transactions, indicating a realignment of his investment portfolio.
Market Reaction
PB Fintech’s shares concluded today’s trading session marginally lower at INR 1,288.55 on the BSE, reflecting investors’ cautious sentiment amidst the regulatory development.
As PB Fintech navigates through the regulatory inquiry, stakeholders await further updates on the matter and the company’s response to the notice in due course.
