In a significant move, PB Fintech, the parent company of online insurance aggregator PolicyBazaar, secured board approval to incorporate a wholly-owned subsidiary—PB Pay Private Limited— to carry out its payments aggregator business, according to a report by Moneycontrol.
The Hindu BusinessLine revealed that PB Pay Private Limited will be a non-banking finance company (NBFC) which will venture into the payment aggregation business, catering to both domestic and cross-border markets, subject to approval from the Reserve Bank of India (RBI).
The news outlets reported that as per the regulatory filing made by the company, the payment aggregator arm will be able to facilitate merchants with offline and/or digital payment acceptance infrastructure. The regulatory filing also mentioned that PB Pay Private Limited will have an initial paid-up share capital of Rs 27 crore.
Earlier in November last year, the RBI issued new guidelines for cross-border payments for the import and export of goods and services which mandated that non-banks providing Payment Aggregators services get RBI authorisation. Days after this new RBI guideline came out Instamojo partnered with licensed payment aggregators to get its previously declined license application approved.
PB Fintech growing in business
This comes at a time when PB Fintech is witnessing robust growth across its core insurance and lending verticals. According to the Moneycontrol report, in the December quarter of FY24, the Gurugram-based company reported a 37 crore after-tax profit, driven by strong insurance premium growth, improved renewal rates (which have higher margins), and better-contributing margins. Additionally, the company boasted cash reserves exceeding Rs 5,000 crore.
Earlier in February, PB Fintech bought the entire PolicyBazaar stake (5.42 per cent) of Singapore-based sovereign wealth fund Temasek Holdings. PB Fintech bought Rs 2,425 crore worth of shares through open market transactions, according to a LiveMint report.
Furthermore, a report by Business Standard suggested that the US-based Capitol Group bought PB Fintech shares through its affiliates during this time.
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