Shares of PB Fintech, the parent company of Policybazaar, plunged nearly 30% on Thursday as investors reacted to proposed changes by the Insurance Regulatory and Development Authority of India (IRDAI) covering insurance distribution commissions and payouts.
PB Fintech shares were trading at Rs 1,320.10 around 12:57 pm, down 30.02% from Wednesday’s close of Rs 1,886.30. The stock had also hit the 20% lower circuit earlier in the session as financial and NBFC stocks faced heavy selling pressure.
The immediate trigger was an IRDAI consultation proposal that could alter commission structures, distribution payouts and expenses across insurance products. Investors are concerned that lower distributor payouts could affect the revenue and margins of platforms such as Policybazaar, which relies on insurance distribution as a major part of its business.
Brokerages cited in the report estimated that a reduction in commission rates could have a significant impact on PB Fintech’s earnings and unit economics. The proposed changes could affect areas including health renewals, term life and motor insurance.
The broader financial sector was also under pressure, with banks and NBFCs facing losses as concerns over insurance-related fee income added to market weakness. The Sensex and Nifty were down more than 1% during the session, while rising crude oil prices and elevated US bond yields added to overall market pressure.
The IRDAI proposals remain under consultation, meaning their final form and eventual impact on companies are yet to be determined.
