Info Edge (India) Ltd shares jumped about 8% on Thursday. The reason for the excitement is clear. Reports indicate that the online insurance market Policybazaar plans to file its draft documents for release in July. Policybazaar and Zomato Ltd are among the various Info Edge issuers. Analysts expect the listing of these companies to act as a trigger for Info Edge stock based on the valuations they get in their respective initial public offerings (IPOs).
A report from www.moneycontrol.com citing sources said that the valuation sought for Policybazaar is $ 4 billion to $ 5 billion. It is higher than expected. For the prospect: Analysts at Ambit Capital Pvt. Ltd assigned a value of $ 2.5 billion to Policybazaar. Note that Ambit’s target price for Info Edge is ₹4545 per share and Policybazaar’s contribution amounts to 5% in the assessment of the sum of the parts of the broker. Currently, Info Edge shares are trading a lot more ₹5280 each. Granted, many analysts believe Info Edge’s valuations are already high.
“We value Zomato at $ 8 billion and PolicyBazaar at $ 3.5 billion and the other issuers at their last known valuation or invested capital,” said analysts at Nomura Financial Advisory and Securities (India) Pvt. Ltd. Management said, “So Policybazaar is preparing for the IPO. The board has not really approved any plan. But we can certainly tell you that they are preparing for it.”
Meanwhile, Info Edge’s March quarter results are slightly below expectations, although billing numbers have been encouraging. Total billings for the March quarter increased 25% year-on-year. Here, the recruiting solutions industry is a big part of Info Edge and the segment performed well, recording a 22% increase in billings.
In the future, the allocation of capital remains the key. Info Edge has a cash balance of approximately ₹3600 crores. Additionally, the company is expected to monetize its stake in Zomato and Policybazaar during IPOs. “The sustained focus on capital allocation will be a key determinant of future value creation. Management is looking for acquisition opportunities related to its core businesses, but we see high valuations as a major hurdle, ”analysts at Edelweiss Securities Ltd said in a report released on June 21.
In the first trades on Friday, Info Edge stock traded down more than 1%.
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