The shares of PB Fintech Ltd, parent company of Policybazaar and Paisabazaar, tumbled 5.53 per cent in Tuesday’s trading session.

The drop in stock price is due to reports of income tax scrutiny regarding regulatory lapses and KYC non-compliance, Moneycontrol reported.

 

The income tax department is set to initiate assessment proceedings against the company, the report mentioned.

A senior government official mentioned in the report highlighted concerns regarding regulatory non-compliance with KYC norms at PB Fintech, leading to a survey conducted by the income tax department.

Income tax officials had previously visited Paisabazaar Marketing and Consulting Private Limited, a wholly owned subsidiary, along with PB Fintech Limited on December 13 and 14, 2023, to inquire about certain vendors associated with Paisabazaar.

PB Fintech, in response, stated that it had provided the necessary information to the IT officials and would continue to cooperate with any further requests from the department.

In an exchange filing, PB Fintech reiterated its commitment to providing additional information as required by the income tax department, reaffirming its stance from a previous communication dated December 14, 2023.

Following this development, PB Fintech’s stock experienced a decline of 5.53 per cent, reaching a low of Rs 911.35 on the Bombay Stock Exchange (BSE).

This comes after recent news of Temasek Holdings, a Singaporean sovereign wealth fund, selling its entire 5.42 per cent stake in the insurance aggregator for Rs 2,425 crore in a block deal.

The market had also witnessed reports of regulatory scrutiny towards other fintech players, such as Paytm, with the Reserve Bank of India uncovering numerous accounts at Paytm Bank created without proper identification.

Additionally, there were speculations about the Enforcement Directorate investigating Paytm and its founder for alleged money laundering, which Paytm later denied.

In its third-quarter review for PB Fintech, Keynote Capitals revised its earnings estimates and set a target price of Rs 1,147 for the company.

The brokerage firm highlighted factors such as renewal commission growth, expansion into tier-2/3 cities through offline channels, and stringent cost management as catalysts for favorable operating leverage.

PB Fintech also reported profitability for the first time in the December quarter, with the brokerage firm hoping this momentum will continue.