Shares of PB Fintech plummeted by more than 8% on Thursday after the company said it had no concrete intention of entering the healthcare space, responding to media reports.
What Happened: Media reports suggested PB Fintech, the parent company of Policybazaar, was considering plans to enter the healthcare sector by establishing its own network of hospitals to create new opportunities within the healthcare ecosystem, expanding the company's portfolio beyond its existing focus on insurance and financial services.
The company issued a clarification to say that while it was exploring opportunities in the area, there has been no concrete decision so far.
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"We believe if claims were a quicker and smoother experience it would increase the number of people buying health insurance. It would be much better if interests were aligned between insurers and hospitals to give customers amazing claims experience and we believe that would grow insurance penetration,” the statement said. The company added that Chairman & CEO Yashish Dahiya had already spoken about it in their last analyst call.
Bernstein has an “outperform” call for the company with a target price of ₹1,720 amid talks of backward integration with hospitals. The firm’s foray into the healthcare business remains unclear for now, but seems to be aimed at revamping the market, the brokerage noted.
The size of the investment is also not clear but is likely to be funded from the $650 million (₹5,439 crore) of cash on its balance sheet. Bernstein said that some investors may look at this integration as a meaningful shift from its capital-light business model.
Price Action: Shares of PB Fintech were down 8.07% to ₹1,583.15 on Thursday morning.
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