- Policybazaar CEO Sarbvir Singh ruled out mass layoffs but plans to cut marketing expenses
- PB Fintech shares plunged 32%, hitting a 52-week low amid heavy selling pressure
- Market cap fell by nearly Rs 25,000 crore, standing at Rs 59,472.98 crore by 3 pm
Policybazaar CEO Sarbvir Singh has said there will be no mass layoffs, with the company planning to recalibrate expenses.
During the company's concall on Thursday, September 24, Singh said that the company's marketing expenses will be reduced as parts of its efforts to recalibrate costs.
His remarks come as Policybazaar parent PB Fintech shares came under heavy selling pressure today, with the stock plunging up to 32% to hit a fresh 52-week low of Rs 1,285.20 per share.
The latest rout eroded nearly Rs 25,000 crore from the company's market capitalisation. By 3 pm on Thursday, PB Fintech's market capitalisation stood at Rs 59,472.98 crore. The 52-week high of PB Fintech stood at Rs 1,963.00, while its 52-week low is Rs 1,285.20.
The sharp drop in PB Fintech shares came after the Insurance Regulatory and Development Authority of India (IRDAI) proposed major changes to insurance distribution regulations. The proposals seek to clamp down on inflated distributor payouts, reduce friction costs for end-policyholders, and transition the industry from an aggressive "push" model to an effort-based and pull-oriented distribution ecosystem.
Digital aggregators and corporate intermediaries are expected to bear the brunt of the proposed regulatory framework, with Bernstein flagging PB Fintech as the most impacted.
"The proposed cuts are ugly, and we were wrong... PB Fin's unit-economics unravels at the proposed take-rate caps," Bernstein said.
The brokerage said Policybazaar's call-centre-heavy cost model could come under pressure from halved health take rates, deep deferrals in pure-term payouts and zeroed-out third-party motor commissions. The proposed ban on collecting customer contact details before quoting could also directly affect digital acquisition funnels.
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