PB FINTECH
FI N ANCI AL A N AL Y S I S AND B US I N E S S VAL UAT I O N
GR OUP 10
DIVYANSH GUPTA - G005
PRATIBHA BALAJI- G018
ANKIT SOMANI - G022
NIVESH THEPADE - G025
GUNESH WAGH - G055
SAIMIRRA RAMANARAYAN - J055
CONTENT
INDEX
I NDUSTRY OVE RVI E W FI N ANCI AL AN AL YS I S VAL UATI ON
COMPANY PROFI L E VAL UATI ON MET HODOLOG Y
COMPETI TO R MUL TI PLES
ANALYSI S
Fintech Industry
OVERVIEW:
One of the fastest growing fintech markets across the world
Valuation expected to reach $150 Bn by 2025
Comprises of multiple segments including payments, lending,
etc.
Industry includes 23 unicorns, as of June'22.
The Indian adoption rate is 87% against a global 64%.
INDUSTRY SCENARIO AND TRENDS:
Major shift in investments to a more equitable distribution of
investments since 2015.
Largest number of real-time transactions globally -
demonstrates a shift towards digital payments
Digital lending - Higher ticket sizes and increased demand from
Tier II, III and IV cities
InsurTech - Growth through leveraging AI, ML
Move towards cashless economy
Wealth Management Services moving towards WeathTech
platforms
FOUNDED IN 2008
ABOUT US MISSION REVENUE OF $126 MN IN FY21
GURUGRAM BASED STARTUP WHICH GOT BUILDING A SAFETY NET FOR
LISTED IN NOV. 2021 HOUSEHOLDS IN INDIA FUNDING OF $780 MN DEC' 21
2 FINTECH UNICORN AFTER PAYTM
LEADING AGGREGATOR AND MARKET VISION VALUATION OF $7.27B+ (NOV' 21)
PLACE FOR INSURANCE PRODUCTS A HEALTHY AND WELL- PROTECTED INDIA
OFFERS 50+ INSURERS AND AROUND 250
PRODUCTS
PLANS TO COMPARE, BUY & SAVE
INVESTORS
TERM LIFE INSURANCE
REVENUE MODEL SOFT BANK CAPITAL GROUP
TENCENT BAY CAPITAL HEALTH INSURANCE
BY GENERATING LEADS FOR INSURERS,
TEMASEK PREMJI INVEST
ADVERTISING AND POLICY SALES
STEADVIEW INFOEDGE CAR INSURANCE
PRESENTLY ~85% REVENUE COMES FROM
POLICY SALES 2 WHEELER INSURANCE
NET PROFITS TARGET MARKET FAMILY INSURANCE
TRAVEL INSURANCE
CHILD SAVING PLAN
GROUP INSURANCE
RETIREMENT PLANS
PROFIT / LOSS SELLING & ADMINISTRATION EXPENSES EMPLOYEE BENEFIT COST SARAL JEEVAN BIMA
SOURCE: MONEYCONTROL SOURCE: PHILIPCAPITAL INDIA RESEARCH
Competitor Analysis
Local Fin-Tech Local Insurance Marketplace Global Competitors
Revenue CAGR vs EBTDA Margin
EV/sales vs ROIC
FINANCIAL ANALYSIS
Revenue vs Expenses Return on Equity
Operating Margin & Net Asset Turnover &
Return on Assets
Profit Margin Leverage Ratio
Valuation Methodology
Whe n v a l ui ng a f i r m, i n f orma ti o n ca n b e 1
dr a wn f r om 3 so ur ce s :
C ur r ent FS
P a s t hi s t or y
C ompet i t or a n d p e e r g r o u p
We ca n do a n a l ys i s o f li f e cycl e o f f i rm a n d
i de n t i f y a t wha t st a g e t he co mp a n y i s. T hi s
wi l l g ui de us r e g a r d i n g a v a i la b i li ty o f
I n f or ma t i on. 2
As p er AD, t he r e a r e 5 s t a ge s.
PB Fi n - t ech i s i n Ra p i d e x p a n s i o n gro wth
p ha s e whi ch i s cha r a ct e r i z e d b y i n cre a si n g
r e v e nue a nd n e g a t i v e i n come . Av a i la b i li ty
of f ew compet i t o r s f i r ms .
Valuation Methodology
1 DISCOUNTED CASH FLOW
We wi l l val u e f i rm us i n g DCF t ech n i q ue.
The t hree ma j or es ti ma t i on req ui red wi l l b e:
Di s counti ng ra te
Gr o wth Rate
Fut ure Cash Fl ows
2 RELATIVE VALUATION
T he r e a r e v a r i o us mult i p le s tha t ca n b e use d f o r v a l u a t i o n s u c h a s
EV/ EBI TDA, EV/ EBI T, P E, PB a n d E V/ S a le s.
T he b es t mul t i p le t ha t ca n b e use d i s E V/ S a le s. As mo st ly , f o r a ny
s t a r t up/ hi g h g r o wt h co mp a n y, the mo st i mp o rta n t t h i ng i s gr o w t h
i n t op li ne. Fo cusi n g o n exp a n si o n a n d a ddi n g n e w c u st o me r s.
Discounted Cash Flow
WACC CALCULATIONS DCF CALCULATIONS
The forecasting is performed for the next 5 years,
The Risk free rate is assumed to be the 10
assuming the revenue will grow at a rate of 45% per
year government bond rate
annum, post which it will grow at the rate of GDP.
The cost of equity is calculated using CAPM
The company is projected to make profits in 2 years,
The company currently has negligible debt.
with reduction in costs and growth in revenue
Valuation Multiples
For Equi ty Mul ti p l es : Re l a t i v e
Pr i ce/ Earni n g s
TYPES OF MULTIPLES
Pr i ce/ Book
Pr i ce/ Sal es
1
For EV Mul t i p l es : DC F
EV/ EBI TDA
EV/ I nvested C a p i ta l
EV/ Sal es
2
Relative Valuation
Due t o t he l a ck o f a n y d i r e ct p e e rs, we
ha v e p er f or me d a r e la t i v e v a l ua ti o n
wi t h P a yt m, a co mp e t i t o r i n the
F i n Tech Spa c e
1 . Based on E V/ S a l es mu l t i pl e, we f i n d
that current ma rk et p ri ce of P B Fi n t ech
i s overval ued. Th e c omp a n y curren t l y
has 1 / 3rd of th e s a l es a s of P a yt m a n d
i s tradi ng at a muc h h i g h er mul t i pl e.
2 . The Pri ce to Book Va l ue of P B
Fi n tech i s l o wer th a n th a t of P a yt m d ue
i ts hi g h book v a l ue of eq ui t y.
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