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“IGI and PB Fintech (PolicyBazaar & PaisaBazaar) – 2 hyped IPOs — initially disappointed investors. Are they finally showing signs of a turnaround? Read a detailed analysis here.”
IPO turnaround: Why IGI and PB Fintech (PolicyBazaar & PaisaBazaar) Could Be the Next Growth Stories
Over the past three years, India’s IPO market has been buzzing with activity. Many companies came to market with sky-high valuations, heavy demand, and flashy narratives. Yet, for many investors, the story turned sour as a large number of these IPOs are now trading below their issue price.
But not all is lost. Two former IPO darlings—International Gemological Institute India Limited (IGI) and PB Fintech (PolicyBazaar & PaisaBazaar)—are showing signs of a turnaround. Could these once-disappointing IPOs be entering their next growth phase? Let’s analyze both companies in detail.
International Gemological Institute India Limited (IGI): The Diamond Certifier
Business Overview
IGI is a global certification giant for diamonds, gemstones, and jewelry. It holds:
- 50%+ market share in India
- 33% global market share
- 65%+ global share in lab-grown diamond (LGD) certification
The company provides certification for both natural and lab-grown diamonds, ensuring quality through the famous 4Cs—Cut, Color, Clarity, Carat—along with fluorescence and symmetry checks. It also runs IGS School of Gemology for education in gemology, grading, and design.
Currently, 97% of revenue comes from certification, while the rest is contributed by value-added services and education. Within certification, lab-grown diamonds and loose stones contribute the highest share (57.5%).
Recent Financial Performance
IGI’s performance in FY25 and FY26 highlights strong growth:
- Revenue (Q1 FY26): ₹31 Cr, +15.8% YoY
- Certification volumes: 3 million in Q2 FY25, +21% YoY
- Certification revenue: ₹292 Cr, +18% YoY
- Lab-grown diamonds & loose stones: +24% YoY
- Natural diamonds: +14% YoY
- Regional growth: Netherlands (+20%), Dubai, and China leading
Cost discipline has been IGI’s biggest strength:
- Expenses fell 4.5% to ₹127 Cr
- Employee costs fell 6.4%
- Operating profit: ₹174 Cr, +37% YoY
- OPM margin: 57.8% (all-time high)
- Net Profit: ₹127 Cr, +62.8% YoY
Growth Outlook
The management has guided for 15–20% revenue growth in CY25. Key growth drivers include:
- Lab-Grown Diamonds (LGD): IGI is well positioned as LGD adoption accelerates in India. LGD jewelry grew 35% YoY in Q2.
- Infrastructure expansion: New labs are being set up to reduce turnaround times.
- AI-based automation: Investments in AI for faster grading and analysis.
- Global opportunity: Rival GIA has stopped full 4C grading for LGDs, instead opting for broader labels. IGI’s continued full grading method gives it a competitive edge.
Risks to Watch
- Oversupply risk in LGDs could pressure pricing.
- Working capital stress: Trade receivables have doubled in 18 months, now 18% of sales.
- IPO-funded acquisitions: IGI Netherlands (profitable) and IGI Belgium (loss-making) raise questions on whether the ₹13B acquisition was overvalued.
- Global slowdown: Sanctions and supply disruptions are hurting diamond trade.
Bottom line: IGI is financially strong, benefiting from cost control and market leadership. But investors must weigh the risks of LGD oversupply and high receivables.
PB Fintech (PolicyBazaar & PaisaBazaar): India’s Digital Insurance Pioneer
Business Overview
PB Fintech runs India’s largest digital platforms for insurance and credit products. Its three major segments are:
- PolicyBazaar (insurance marketplace): 54% of revenue in Q1 FY26.
- PaisaBazaar (credit marketplace): 8% of revenue in Q1 FY26, focusing on secured loans and mutual funds.
- New initiatives: PB Partners, PB for Business, UAE operations, and PB Connect—together contributing 38%.
Recent Financial Performance
Over the past three years, PB Fintech has maintained strong growth:
- Sales CAGR: 52%
- Profit CAGR: 34%
For Q1 FY26, numbers were solid:
- Revenue: ₹1,348 Cr, +33.6% YoY
- Health insurance premiums: +65% YoY (best in nine quarters)
- Annualized insurance premiums (AUM): ₹26,463 Cr, +4.1x since Q1 FY22
- Corporate insurance business: +37% YoY
- New initiatives: +50% YoY (UAE business up 68%)
On the cost side:
- Expenses grew only 25% vs revenue growth of 34%
- Advertising spend grew just 3%
- Employee costs rose 23%
This tight cost control helped PB Fintech move from negative 3.9% OPM to positive 2.5%.
Growth Outlook
India’s financial services remain underpenetrated, providing long-term tailwinds:
- Life insurance density in India: ₹6,500 vs US at ₹1.75 lakh
- Credit card penetration: 5%
- Retail lending: 37% of GDP
PB Fintech’s targets:
- ₹1 lakh crore in annual insurance premiums by FY30 (currently ₹26,463 Cr).
- Savings & pensions: Pension products now form 15% of the savings mix.
- Tech investments: ML-based fraud detection, sentiment analysis, document forensics, and AI-driven sales intelligence.
Risks to Watch
- Cash flow strain: CFO dropped from +₹9 Cr to –₹183 Cr due to working capital drag.
- Credit weakness: Core PaisaBazaar dispersals down 33% YoY; unsecured loans remain stressed.
- Savings segment underperforming: Below management’s expectations.
- Corporate insurance still loss-making despite scale-up.
Bottom line: PB Fintech is executing well in insurance but needs to fix weak credit and savings segments. Strong under-penetration in India offers a massive runway, but working capital and profitability remain challenges.
Final Thoughts: Are These IPOs Ready for a Turnaround?
Both IGI and PB Fintech are classic IPO cases—hyped early, punished later, and now gradually proving themselves operationally.
- IGI benefits from its leadership in diamond certification and LGDs, but global oversupply and receivable build-up are risks.
- PB Fintech is building scale in insurance, with tight cost control, but must solve credit and cash flow issues to sustain growth.
For investors, patience may be required. These aren’t short-term momentum plays but long-term growth stories in niche industries.
Key Takeaway
The Indian IPO market has seen its share of hype and disappointment, but some companies are now stabilizing. IGI and PB Fintech could reward patient investors if their growth outlook plays out. As always, do your own due diligence before investing.
Disclaimer: This article is for educational purposes only and should not be considered financial advice. Please consult your financial advisor before making investment decisions.
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