HDFC MF bets on PB Fintech, buys stake worth Rs 321 crore as IRDAI reforms trigger 36% stock rout

HDFC Mutual Fund bought 25 lakh shares of PB Fintech at Rs 1,282.30 per share on September 24, according to NSE bulk deal data, in a transaction worth about Rs 321 crore.

The purchase came on a day when shares of PB Fintech, the parent company of Policybazaar and Paisabazaar, plunged 36% following the Insurance Regulatory and Development Authority of India’s (IRDAI) proposed overhaul of insurance distribution rules.

PB Fintech shares breached multiple circuit limits during Thursday’s trading session before closing at Rs 1,207 apiece on the NSE, a 52-week low. The stock recorded its worst single-day fall since its listing in November 2021. The sharp decline wiped out more than Rs 31,426 crore from PB Fintech’s market capitalisation, which stood at Rs 55,863.51 crore at the end of Thursday’s trading session.


The selloff followed IRDAI’s consultation paper proposing changes to the way insurers pay commissions to distributors. Under the proposed framework, commission limits would be linked to factors including the type of insurance product, distribution channel, size of the policy and the effort involved in selling it.

The regulator has also proposed bringing back commission caps across life, health and motor insurance. These caps were removed in 2023.

ALSO READ: PB Fintech shares crash 36%, bloodbath wipes off Rs 31,426 cr from m-cap after IRDAI’s reform plans. What Citi and Jefferies are warning

For PB Fintech, the immediate concern is the potential impact on its general insurance business. Co-founder and group CEO Yashish Dahiya told analysts on September 24 that the proposed commission structure could reduce the company’s revenue from general insurance to between one-third and 40% of its current level.

Dahiya said the proposed commission caps could have a severe impact on PB Fintech’s non-life insurance business, potentially prompting tighter spending and slower hiring. The regulatory changes could force PB Fintech to rethink the pace and shape of its expansion, according to a Reuters report cited in the details shared.

ALSO READ: PB Fintech forced to rethink business plan as India insurance commissions cap comes as a major shocker

PB Fintech is the parent company of Policybazaar and Paisabazaar. Founded in 2008 and based in Gurugram, the company operates as a digital aggregator, connecting consumers with financial partners rather than retaining credit or insurance risk.

Disclosure: This article has been written by Kumar Gaurav, who is not a SEBI-registered Research Analyst or an Investment Adviser. Gaurav and their ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here