PB Fintech Stock: Sometimes there is news in the stock market that changes the direction of a strong stock overnight. These days, something similar is happening to investors at PolicyBazaar’s parent company PB FinTech. The market is seeing constant selling pressure on the company’s shares. In today’s trading session, the company’s stock again fell by more than 6 percent. If we look at the data of the last four trading days, this stock has lost 43 percent. The scariest thing about this is that 36 percent of the total decline was wiped out in just one day of trading.

All efforts to control the stock are currently proving unsuccessful. On September 24, HDFC Mutual Fund bought heavily. He bought 25 lakh shares of PB Fintech at a price of Rs 1,282.30. Along with this, the brokerage firm Bernstein also showed its positive attitude about the company. But all these together could not save the stock from tumbling. The stock lost 4.77 percent today and traded at Rs. 1096.90 to Rs. During intra-day trading, it fell 6.56 percent to Rs. It touched a low of 1,076.35.

IRDA’s proposal spoils the game

After all, why did such a strong stock suddenly collapse like a house of cards? The direct answer to this is a new proposal from insurance regulator IRDAI. IRDA has decided to make some major changes in the rules related to selling insurance policies. Under this new structure, it has been said that a cap will be fixed on the commission earned on health, motor and life insurance. This proposal seems to be overshadowing the business model of PB fintech.

There is a big threat on profits

Policy market revenues are directly under threat due to the news of cap on commissions. Considering the seriousness of the situation, the management of the company itself has given big signals. He believes that these proposals could take a huge hit to the company’s top line by around 30 per cent. Its worst impact will be on the general insurance business. Now the company is working on a new strategy to compensate for this loss. To keep costs under control, new hires will be reduced. Apart from this, drastic measures like cutting the marketing budget are also being considered.

The brokerage house cut targets

After this blow from IRDA, many brokerage firms have changed their minds about PB fintech. HSBC took action last week and downgraded the stock. It has given it a ‘Hold’ rating, while the target price is Rs. 2100 reduced to Rs. 1150 done. Local brokerage firm Motilal Oswal also raised Rs. Maintained its ‘Neutral’ rating with a target price of 1150.

However, foreign brokerage firm Bernstein has a slightly different view. It has again rated it ‘outperform’. Also its target price is Rs. 2310 has been determined. But Bernstein also has a warning. He estimates that with the implementation of IRDAI’s proposals, the insurance rate of PB Fintech could come down by around 40 percent. The long-term impact would be a huge drop of up to 34 percent in FY28 profits.