Shares of , the parent company of Policybazaar and Paisabazaar, crashed another 8% in Thursday’s trade on October 1, reaching ₹980 and falling back to levels last seen in February 2024, as market concerns over the proposed new insurance rules continued to weigh on the stock.
The stock remained in the headlines after the Insurance Regulatory and Development Authority of India (IRDAI), last week, proposed sweeping changes to insurance commission rules. The risk for insurance intermediaries had been lurking ever since the Insurance Amendment Bill, 2025, was passed in December.
Analysts flagged that the proposed commission cuts could hit the company’s bottom line much harder than previously projected, prompting them to sharply cut their earnings estimates. The revisions wiped out the stock’s recent gains in over a week and also dented returns for mutual fund investors holding the stock.
Mutual funds face ₹11,726-crore hit
With today’s crash, the stock extended its losing streak to six straight sessions, taking the cumulative decline to 48%. This marked its biggest sustained sell-off since its listing in November 2021 and brought the stock back to its IPO price. During the intraday session, the stock briefly fell below its issue price before staging a mild recovery.
The losses have put the stock on course for its biggest annual decline since 2022, when it plunged 53%, while also resulting in significant losses for domestic mutual funds.
At the end of the June quarter, 37 mutual funds collectively owned a 28.32% stake in the company, almost double the 15.86% stake they held during the same period last year, according to Trendlyne data. The crash has resulted in a cumulative notional loss of around ₹11,726 crore for mutual fund houses, based on the stock’s closing price on Thursday.
Some of the key mutual funds holding stakes in the company include HDFC Mutual Fund, with a 4.87% stake; Mirae Asset Large & Midcap Fund, which owns 3.45%; and Tata Digital India Fund, which held a 1.82% stake in the company at the end of Q1.
Apart from mutual funds, the bruising sell-off has also weighed on retail and FII portfolios, with the two investor categories collectively holding 37.3% and 22.1% stakes, respectively, in the company, according to Trendlyne shareholding data.
What investors should now?
Both global and domestic brokerage firms have trimmed their target prices for the stock, while largely keeping their FY27 and FY28 earnings estimates unchanged. The implementation of the proposed commission changes is expected from FY28, while the consultation paper may undergo revisions after feedback is received in October.
Global brokerage firm Jefferies has trimmed its target price by 25% to ₹1,540, while Bernstein slashed its target by 53% to ₹1,085 from ₹2,310, just days after retaining its earlier target.
Bernstein said lower general insurance take rates under the proposed framework may be insufficient to cover PB Fintech’s current costs. Meanwhile, HSBC also lowered its price target to ₹1,150 from ₹2,100 while retaining its ‘Hold’ rating.
Domestic brokerage firm Motilal Oswal Financial Services cut its target valuation by 37% to ₹1,150, citing a de-rating in the valuation multiple, while retaining its ‘Neutral’ rating.
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