PB Fintech will Establish a Fully-Owned Subsidiary for Healthcare Services

Nitin Konde, Varun Bhardwaj

Dec 5, 2024 — 2 min read

PB Fintech to Launch Fully-Owned Healthcare Services Subsidiary

The board has given PB Fintech, an insurtech major, permission to establish a new subsidiary in order to provide healthcare services. "The incorporation of the wholly owned subsidiary has been approved by the board of directors of PB Fintech Limited through a circular resolution passed on December 03, 2024, to carry on the business of healthcare services," the insurtech major stated in a filing with the BSE.

PB Fintech added that the incorporation procedure would be finished after receiving approval from the appropriate authorities and that it will submit an application to float the new healthcare-focused company at a later time. At a face value of INR 10 each, the listed insurtech platform and other corporate nominees will initially purchase 50,000 equity shares of the new firm.

The Subsidiary will be Launched With the Approx. Investment of $100 Mn

Two months ago, Yashish Dahiya, the group CEO and chairman of PB Fintech, stated that the company is thinking about entering the healthcare industry and would invest $100 million one time to purchase a 30% share in a new healthcare startup. He brought up concerns at the time about middle-class families' inability to afford the nation's healthcare system.

According to him, PB Fintech would try to close the gap that exists between insurance firms and hospitals. The announcement, however, caused a significant reaction from the markets. Following Dahiya's suggestion at the company's latest experiment, the shares fell as much as 10% during intraday trading on September 26. However, after he formally acknowledged the situation to the media on September 30, shares experienced a significant recovery.

The New Subsidiary will Focus on Health Care and Allied Services

The subsidiary, which has an INR 5 lakh authorised share capital, will concentrate on healthcare and related services. The business made it clear that upon incorporation, the new entity will become a connected party. Since PB Fintech is a professionally run company, it does not have a single promoter or promoter group.

After receiving the required approvals from the Registrar of Companies and the Ministry of Corporate Affairs, the incorporation procedure will start. The transaction signifies PB Fintech's strategic expansion into the healthcare industry, even though turnover statistics are not yet available due to the entity's unestablished status.

Financial Dynamics of PB Fintech

The healthcare plans offered by PB Fintech had previously drawn criticism from broking firm Bernstein, which stated that the move would represent a "sharp departure from the company's current asset-light model to a more asset-heavy space." In terms of finances, PB Fintech keeps increasing its earnings. In the second quarter (Q2) of the fiscal year 2024–25 (FY25), the company reported a net profit of INR 51 Cr, compared to a net loss of INR 21.11 Cr in the same period last year. From INR 811.6 Cr in Q2 FY24 to INR 1,167.2 Cr in the reviewed quarter, revenue from operations increased by more than 43%.