PB fintech crash: PolicyBazaar stock scattered like a pack of cards, stock may fall further

PB fintech crash: Sometimes a news in the stock market changes the direction of the entire company. Something similar happened with PB Fintech. Shares of this parent company of PolicyBazaar seem to have experienced an earthquake these days. Investors who were expecting profits till yesterday are upset to see heavy losses. On September 24, the company’s shares crashed to a lower circuit of 36 percent. The massive decline stopped at a 52-week low of ₹1,207.20. Even today i.e. Friday the situation is not very good. As the market opened, stocks saw some green. The stock rose nearly 4% in the opening session, but was back in the red within minutes. At the time of writing, the stock is trading around ₹1,146, down 4.34%.

Investors lost crores of rupees in a single day

Ups and downs in the stock market are very common. But this decline in PB fintech is not insignificant at all. The company’s market cap was eroded by more than ₹31,000 crore in just one trading session. The total market cap of the company, which earlier looked very strong, has suddenly come down to just ₹55,860 crore. Even big market experts have been surprised by such a huge sell-off. Since the beginning of the year 2026, there was constant pressure on this stock. Shares of PB Fintech have fallen 33.2 percent so far this year. The Nifty 50 has fallen only 11.8 percent in the same period. These statistics clearly show that the decline in policy market shares is much deeper than the general trend of the market.

The new IRDAI rule that created a stir

Now the biggest question that arises is what suddenly happened that caused the shares to fall so much. The main reason is a new proposal by the insurance regulator IRDAI. The regulator has released a consultation paper to determine the cap on insurance distribution commission. If you understand in simple language, now the government is going to stop the commission that companies get on selling policies.

PolicyBazaar is actually an aggregator platform. Here people see insurance plans of different companies at one place. When a customer buys a policy from the platform, the insurance company pays a hefty commission to the policy marketplace. This commission is the biggest source of income for PB Fintech.

The new proposal states that 15-20% commission will be fixed for new policies on health insurance. At the same time, on renewal or porting of the policy, it is suggested to reduce the commission to only 5-10%. Commission capping has been proposed not only in health, but also in motor life insurance. In life insurance, the idea is to fix the first year’s commission between 5-20% depending on the policy term. Now you can think for yourself how the profit of the company will be saved if this commission is deducted. This fear has spread panic in the market.

The brokerage house undercut the target badly

As soon as the buzz of this big change is heard, from global to local brokerage houses have changed their attitude towards the company. Leading global brokerage firm HSBC has directly downgraded PB Fintech’s rating. It has given it a ‘Hold’ rating. The biggest hit has been to the company’s target price. HSBC cut the target price to ₹1,150 per share from ₹2,100. It is also about 5% lower than the September 24 closing price.

HSBC clearly believes that the new rules will have a profound impact on the company’s earnings. The brokerage has cut EPS estimates by a whopping 56% for fiscal 2028. While for FY 2029 it has been reduced by 17%. Brokerages say the cut in take-rate will directly hurt the company. However, there may be some relief in the future if the company cuts its costs.

Will this massive drop in stocks last longer?

Local brokerage house Motilal Oswal has also analyzed the entire situation in detail. He has given a target of ₹1,150, maintaining his ‘neutral’ rating on the stock. Motilal Oswal has predicted two types of situations. If the new IRDAI rules are implemented, the company’s core online insurance revenue could take a direct hit of around 30% in FY 2028.

If PB Fintech doesn’t cut its costs immediately, its net income could drop by 46%. In such a scenario, the stock’s valuation would reach 73 times PE multiple, which would prove too expensive. Another scenario is that if the company reduces its personnel as well as advertising expenses by 20%, the reduction in profits may be limited to 30%. Market experts clearly say that stocks will remain uncertain until IRDAI officially announces its final rules. Investors should avoid making any hasty decisions at present.