The parent company of Policybazaar and Paisabazaar, PB Fintech Ltd., saw a 5% decline in its share price on Tuesday in response to a media story claiming the online insurance aggregator was being investigated by the income tax authorities for regulatory violations and KYC non-compliance. The article stated that the corporation would shortly face assessment proceedings from the income tax department.
According to a senior government official quoted in the Moneycontrol report, there were regulatory non-compliance issues related to knowing your customer (KYC) with PB Fintech. The income tax agency also performed a survey regarding these difficulties. The source informed Moneycontrol that there are problems with regulatory oversight.
Following the event, the stock dropped 4.72% on the BSE, reaching a low of Rs 917.60. The stock made headlines recently when Temasek Holdings, a sovereign wealth fund based in Singapore, sold the entirety of its 5.42 percent ownership in the insurance aggregator for a block deal worth Rs 2,425 crore.
According to reports, the RBI has discovered hundreds of thousands of Paytm Bank accounts that were opened without the required documentation. Additionally, there were rumors that Paytm and its creator were the subject of a money laundering investigation by the Enforcement Directorate, which Paytm later dismissed as conjecture.
Keynote Capitals updated its earnings projections and recommended a target price of Rs 1,147 for PB Fintech in its Q3 review. According to the brokerage, PB Fintech was at a turning point in its development, propelled by factors like increasing renewal commissions, deliberate offline channel expansion into tier-2 and tier-3 cities, and strict cost control that it believed would result in advantageous operating leverage. In the December quarter, PB Fintech also revealed profitability for the first time, and the brokerage predicted that the trend would continue.
