Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

Star Health and Allied Insurance (SHAI), the largest private health and retail health insurance company in India, plans to raise around US$1.0bn in its India IPO. It is backed by Westbridge and Rakesh Jhunjhuwala. Owing to the latter, it will draw a lot of retail interest. SHAI insured 20.5m people in FY21. SHAI primarily offers retail health insurance which accounted for 87.9% of its FY21 GWP. Individual agents accounted for 97% of its FY21 GWP. Its GWP has grown by 72.6% over FY19-21 on the back of 58.6% growth in agents and 62.5% growth in the number of policies. SHAI has consistently grown faster than the industry over the past few years resulting in a steady increase in its market share. With a gross written premium (GWP) of INR93.5bn in FY21, SHAI had a market share of 15.8% in the Indian health insurance market and 31.3% in the retail health insurance market. Along with growing fast, SHAI has also managed to remain profitable since FY16 with its claims ratio remaining below 67% in most years. Although, the company recorded a loss in FY21 on the back of higher claims due to COVID-19 and reinsurance related adjustments. In addition, as the second COVID-19 wave only peaked in 1Q22, FY22 will be impacted as well.

Star Health and Allied Insurance (SHAI), the largest private health and retail health insurance company in India, plans to raise around US$1.0bn in its India IPO. It is backed by Westbridge and Rakesh Jhunjhuwala. Owing to the latter, it will draw a lot of retail interest. SHAI insured 20.5m people in FY21. SHAI primarily offers retail health insurance which accounted for 87.9% of its FY21 GWP. Individual agents accounted for 97% of its FY21 GWP. Its GWP has grown by 72.6% over FY19-21 on the back of 58.6% growth in agents and 62.5% growth in the number of policies. SHAI has consistently grown faster than the industry over the past few years resulting in a steady increase in its market share. With a gross written premium (GWP) of INR93.5bn in FY21, SHAI had a market share of 15.8% in the Indian health insurance market and 31.3% in the retail health insurance market. Along with growing fast, SHAI has also managed to remain profitable since FY16 with its claims ratio remaining below 67% in most years. Although, the company recorded a loss in FY21 on the back of higher claims due to COVID-19 and reinsurance related adjustments. In addition, as the second COVID-19 wave only peaked in 1Q22, FY22 will be impacted as well.

Star Health Insurance Pre-IPO - Leading the Retail Healthcare Insurance Space

Kakao Pay (KP), one of South Korea’s largest payment and financial services apps, aims to raise up to US$1.3bn in its South Korean IPO. Kakao held a 55% stake prior to listing, with Ant Financial holding the balance 45% stake.As of 1H21, KP had a total of 36m users and around 20m monthly active users (MAU). It processed a total GMV of KRW66.9tn in 2020 and it had already generated KRW47.9tn GMV in 1H21 itself. As of the end of 1H21, it had dealings with more than 610,000 affiliated stores and 100 financial institutions.KP began operation in Sep 2014 as a fintech division of Kakao to facilitate online payments. Ant Financial invested US$200m in the company in Feb 2017 and the division was spun out of Kakao in Apr 2017. Since spinning out, the number of MAUs have grown 14x from 2Q17 to 2Q21, while the quarterly transaction amount grew 61x from KRW0.4tn in 2Q17 to KRW24.5tn in 2Q21. Over the past few years the company has been expanding its offering beyond payment processing to include other financial products. On the back of this, its revenue has been growing faster than its GMV.

Kakao Pay (KP), one of South Korea’s largest payment and financial services apps, aims to raise up to US$1.3bn in its South Korean IPO. Kakao held a 55% stake prior to listing, with Ant Financial holding the balance 45% stake.As of 1H21, KP had a total of 36m users and around 20m monthly active users (MAU). It processed a total GMV of KRW66.9tn in 2020 and it had already generated KRW47.9tn GMV in 1H21 itself. As of the end of 1H21, it had dealings with more than 610,000 affiliated stores and 100 financial institutions.KP began operation in Sep 2014 as a fintech division of Kakao to facilitate online payments. Ant Financial invested US$200m in the company in Feb 2017 and the division was spun out of Kakao in Apr 2017. Since spinning out, the number of MAUs have grown 14x from 2Q17 to 2Q21, while the quarterly transaction amount grew 61x from KRW0.4tn in 2Q17 to KRW24.5tn in 2Q21. Over the past few years the company has been expanding its offering beyond payment processing to include other financial products. On the back of this, its revenue has been growing faster than its GMV.

Kakao Pay IPO - Guided by Ant Financial to Be a Mini Ant

Fintech & EM-focused Analyst, KT Capital Group

Alec Tseung

Fintech & EM-focused Analyst

Thematic (Sector/Industry)

This Original aims to showcase the leading Insurtech companies in the three insurance markets with the highest growth potential in Asia - China, India, and Southeast Asia.Insurtech companies can be broadly divided into three categories - full-stack Inustech, Insurtech marketplace, and Insurtech enablers. As such, the Original also presents the Insurtech companies based on these categories by showing their company overview, how they leverage tech to do things differently, their product offerings, and financial information (capital raise and valuation in case of no financial information).The Insurtech companies presented are:<ul><li>Full-stack Insurtech: ZhongAn Online (China), Acko (India), SingLife (Singapore)</li><li>Insurtech marketplace: Waterdrop (China), Huize (China), Policybazaar (India), Coverfox (India), Turtlemint (India), PasarPolis (Indonesia), PolicyStreet (Malaysia)</li><li>Insurtech enablers: eBaoTech (China), Turtlemint (India), CXA Group (Singapore)  </li></ul>By analyzing the key Insurtech companies and their development in these countries/regions, we have further identified the following key trends/themes in the sector:<ul><li>In the near future, Insurtech is unlikely a threat to traditional (re)insurers who have also been actively investing in Insurtech themselves.</li><li>Insurtech marketplace is expanding offline and will likely embrace a hybrid model, especially in less developed insurance markets.</li><li>L&amp;H full-stack Insurtech companies are yet to be common in less developed insurance markets.</li><li>Insurtech is going to promote differentiated growth in insurance markets of different maturity.</li><li>“ReInsurtech” is currently still a blind spot.</li></ul><h2>What is Original?</h2>A deep dive into 12 (mostly private) leading Insurtech companies, under each Insurtech category from China, India, and Southeast Asia, is presented in this Original. Key investment thesis and risks are also developed for each company.  Based on the company analysis and the broader insurance and Insurtech development in these countries/regions, five key Insurtech trends and themes are further identified.

This Original aims to showcase the leading Insurtech companies in the three insurance markets with the highest growth potential in Asia - China, India, and Southeast Asia.Insurtech companies can be broadly divided into three categories - full-stack Inustech, Insurtech marketplace, and Insurtech enablers. As such, the Original also presents the Insurtech companies based on these categories by showing their company overview, how they leverage tech to do things differently, their product offerings, and financial information (capital raise and valuation in case of no financial information).The Insurtech companies presented are:Full-stack Insurtech: ZhongAn Online (China), Acko (India), SingLife (Singapore)Insurtech marketplace: Waterdrop (China), Huize (China), Policybazaar (India), Coverfox (India), Turtlemint (India), PasarPolis (Indonesia), PolicyStreet (Malaysia)Insurtech enablers: eBaoTech (China), Turtlemint (India), CXA Group (Singapore)  By analyzing the key Insurtech companies and their development in these countries/regions, we have further identified the following key trends/themes in the sector:In the near future, Insurtech is unlikely a threat to traditional (re)insurers who have also been actively investing in Insurtech themselves.Insurtech marketplace is expanding offline and will likely embrace a hybrid model, especially in less developed insurance markets.L&amp;H full-stack Insurtech companies are yet to be common in less developed insurance markets.Insurtech is going to promote differentiated growth in insurance markets of different maturity.“ReInsurtech” is currently still a blind spot.What is Original?A deep dive into 12 (mostly private) leading Insurtech companies, under each Insurtech category from China, India, and Southeast Asia, is presented in this Original. Key investment thesis and risks are also developed for each company.  Based on the company analysis and the broader insurance and Insurtech development in these countries/regions, five key Insurtech trends and themes are further identified. 

Asian Insurtech: The New Golden Child in Town?

Indian Accounting Research Analyst, Trudence Capital Advisors

Nitin Mangal

Indian Accounting Research Analyst

Trudence Capital Advisors

Trudence Capital Advisors Private Limited is a SEBI-registered Research Analyst, holding SEBI registration number INH000015747. Our firm is dedicated to providing independent and unbiased research on Indian mid to large-cap companies. Trudence Capital is known for its counter-consensus views, with a focus on forensic research and on-ground primary investigations. Our research approach is thorough, involving detailed analysis of accounting practices and governance, alongside extensive channel checks.

Independent & Unbiased Research

One Mobikwik Systems / Equity Capital Markets

It is not surprising to see a fresh IPO filing of a new-age tech, internet platform company every week. In this insight, we talk about another fintech payments company, <a href="https://www.smartkarma.com/entities/one-mobikwik-systems-ltd" target="_blank" data-smartkarma-citation="entities:33952:1" rel="noopener">One Mobikwik Systems (1235487D IN)</a> (Mobikwik) who is one of the nearest competitors to <a href="https://www.smartkarma.com/entities/paytm-mobile-solutions-pvt-ltd" target="_blank" data-smartkarma-citation="entities:26149:1" rel="noopener">Paytm (PAYTM IN)</a> . While Paytm is an entire universe in itself; Mobikwik's services have a narrower sphere albeit still varied to some extent in terms of product offerings.Mobikwik was incorporated in 2008, and since then it has established itself as one of the pure-play payments company, justified by the consumer payments segment contributing nearly 80% to the consolidated GMV and 72.5% to the consolidated topline. Consumer payments consists merchant fee when users transacts via MobiKwik Wallet, and certain convenience fees.The wallet segment contributes heavily to the topline for the company but it also has a lot of competitors. Hence, Mobikwik's key differentiating product becomes the BNPL segment (Buy now pay later) which was launched not a long time ago, and can be a potential game changer for the company. BNPL is effectively a credit product given to its users by lending partners via Mobikwik platform. BNPL includes short term 15-day cycle product which is interest fee (Zip), along with EMI products for a longer tenure having an interest component (Zip EMI).Mobikwik, in order to generate an additional source of revenue via leveraging, also offers payment gateway services i.e. Zaakpay to its merchants in return for a fee. Mobikwik may have a diverse stream of payments and credit revenue, but it, however, suffers from a plethora of discomforts. The company has a negative net worth (Ind AS) since F19 and has a very poor visibility of any profits in the short-mid term, although it has reported positive segment-wise results. Moreover, operations were seriously affected in F21 and they don't seem to be a stand-out, especially when other competitors like Paytm are lurking around. The balance sheet issues extend to incorrect treatment and some puzzling line items. Final nail in the coffin is seen in the form of several regulatory and legal issues, which can put Mobikwik in a fix.

It is not surprising to see a fresh IPO filing of a new-age tech, internet platform company every week. In this insight, we talk about another fintech payments company, One Mobikwik Systems (1235487D IN) (Mobikwik) who is one of the nearest competitors to Paytm (PAYTM IN) . While Paytm is an entire universe in itself; Mobikwik's services have a narrower sphere albeit still varied to some extent in terms of product offerings.Mobikwik was incorporated in 2008, and since then it has established itself as one of the pure-play payments company, justified by the consumer payments segment contributing nearly 80% to the consolidated GMV and 72.5% to the consolidated topline. Consumer payments consists merchant fee when users transacts via MobiKwik Wallet, and certain convenience fees.The wallet segment contributes heavily to the topline for the company but it also has a lot of competitors. Hence, Mobikwik's key differentiating product becomes the BNPL segment (Buy now pay later) which was launched not a long time ago, and can be a potential game changer for the company. BNPL is effectively a credit product given to its users by lending partners via Mobikwik platform. BNPL includes short term 15-day cycle product which is interest fee (Zip), along with EMI products for a longer tenure having an interest component (Zip EMI).Mobikwik, in order to generate an additional source of revenue via leveraging, also offers payment gateway services i.e. Zaakpay to its merchants in return for a fee. Mobikwik may have a diverse stream of payments and credit revenue, but it, however, suffers from a plethora of discomforts. The company has a negative net worth (Ind AS) since F19 and has a very poor visibility of any profits in the short-mid term, although it has reported positive segment-wise results. Moreover, operations were seriously affected in F21 and they don't seem to be a stand-out, especially when other competitors like Paytm are lurking around. The balance sheet issues extend to incorrect treatment and some puzzling line items. Final nail in the coffin is seen in the form of several regulatory and legal issues, which can put Mobikwik in a fix.

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<a href="https://www.smartkarma.com/entities/policybazaar-insurance-web-aggregator" target="_blank" data-smartkarma-citation="entities:33470:1" rel="noopener">Policybazaar Insurance Web Aggregator (1569999D IN)</a>/PB Fintech operates the Policybazaar and Paisabazaar platforms in India. Policybazaar is India’s largest digital insurance marketplace with a 93.4% market share based on the number of policies sold in FY20, according to Frost &amp; Sullivan. Paisabazaar is India’s largest digital consumer credit marketplace with a 51.4% market share, based on disbursals in FY20, according to Frost &amp; Sullivan. PB Fintech’s shareholders include SoftBank Vision Fund, <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>, Tiger Global and <a href="https://www.smartkarma.com/entities/info-edge-india-ltd" target="_blank" data-smartkarma-citation="entities:14461:1" rel="noopener">Info Edge India (INFOE IN)</a>.   PB Fintech is looking to raise Rs60.2 billion ($809 million) at an $5 billion valuation, according to press reports. The IPO comprises a primary raise of Rs37.5 billion and a secondary raise of Rs22.7 million. PB Fintech is also considering a pre-IPO placement of Rs7.5 billion in new shares. The pre-IPO placement amount will be deducted from the primary portion of the raise. India has a highly underpenetrated insurance market due to financial illiteracy, lack of awareness of insurance, low household disposable income, complex products and inefficiencies in distribution system. Insurance penetration (premium as % of GDP) is at 3.8% in India as compared to the global average of 7.2%. However, online distribution channels are changing the insurance distribution landscape in India. A key enabler of online distribution are digital insurance marketplaces which account for 54% of the total online insurance market in FY20, according to Frost &amp; Sullivan. Policybazaar, which is India’s largest digital consumer credit marketplace, is a direct play on the rising insurance penetration rates in India. <a href="https://www.smartkarma.com/entities/paytm-mobile-solutions-pvt-ltd" target="_blank" data-smartkarma-citation="entities:26149:1" rel="noopener">Paytm (PAYTM IN)</a>, which also has an insurance marketplace amongst its various offerings, offers an alternative but less direct exposure to the Indian insurance market. We discussed the Paytm IPO in <a href="https://www.smartkarma.com/insights/paytm-ipo-initiation-a-payments-led-super-app" target="_blank" data-smartkarma-citation="insights:54983" rel="noopener">Paytm IPO Initiation: A Payments-Led Super-App</a>. <div class="content-highlight">PB Fintech operates an asset-light capital model and does not underwrite any insurance or retain any credit risk on loans. Due to its market-leading platforms, the business is well positioned to benefit from the post-COVID-19 recovery in insurance policies sales and loan disbursals by its partners. In July 2021, PB Fintech obtained an insurance brokerage license will allow Policybazaar to broaden its consumer reach through the offline channel. Helped by strong brand recognition and retention rates, the favourable unit economics also suggest that profitability is within reach. Overall, we think that PB Fintech has attractive fundamentals.</div>

Policybazaar Insurance Web Aggregator (1569999D IN)/PB Fintech operates the Policybazaar and Paisabazaar platforms in India. Policybazaar is India’s largest digital insurance marketplace with a 93.4% market share based on the number of policies sold in FY20, according to Frost &amp; Sullivan. Paisabazaar is India’s largest digital consumer credit marketplace with a 51.4% market share, based on disbursals in FY20, according to Frost &amp; Sullivan. PB Fintech’s shareholders include SoftBank Vision Fund, Tencent (700 HK), Tiger Global and Info Edge India (INFOE IN).   PB Fintech is looking to raise Rs60.2 billion ($809 million) at an $5 billion valuation, according to press reports. The IPO comprises a primary raise of Rs37.5 billion and a secondary raise of Rs22.7 million. PB Fintech is also considering a pre-IPO placement of Rs7.5 billion in new shares. The pre-IPO placement amount will be deducted from the primary portion of the raise. India has a highly underpenetrated insurance market due to financial illiteracy, lack of awareness of insurance, low household disposable income, complex products and inefficiencies in distribution system. Insurance penetration (premium as % of GDP) is at 3.8% in India as compared to the global average of 7.2%. However, online distribution channels are changing the insurance distribution landscape in India. A key enabler of online distribution are digital insurance marketplaces which account for 54% of the total online insurance market in FY20, according to Frost &amp; Sullivan. Policybazaar, which is India’s largest digital consumer credit marketplace, is a direct play on the rising insurance penetration rates in India. Paytm (PAYTM IN), which also has an insurance marketplace amongst its various offerings, offers an alternative but less direct exposure to the Indian insurance market. We discussed the Paytm IPO in Paytm IPO Initiation: A Payments-Led Super-App. PB Fintech operates an asset-light capital model and does not underwrite any insurance or retain any credit risk on loans. Due to its market-leading platforms, the business is well positioned to benefit from the post-COVID-19 recovery in insurance policies sales and loan disbursals by its partners. In July 2021, PB Fintech obtained an insurance brokerage license will allow Policybazaar to broaden its consumer reach through the offline channel. Helped by strong brand recognition and retention rates, the favourable unit economics also suggest that profitability is within reach. Overall, we think that PB Fintech has attractive fundamentals.

PB Fintech (Policybazaar) IPO Initiation: Insurance Policy

India

One 97 Communications Limited provides payment solutions. The Company provides online services such as hotel booking, top ups, data processing, games, mobile content, and bill payments. One 97 Communications Limited serves customers worldwide.

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Paytm (PAYTM IN)

Star Health Insurance Pre-IPO - Leading the Retail Healthcare Insurance Space

Star Health and Allied Insurance (SHAI), the largest private health and retail health insurance company in India, plans to raise around US$1.0bn in...

Sumeet Singh

Kakao Pay IPO - Guided by Ant Financial to Be a Mini Ant

Kakao Pay, one of South Korea’s largest payment and financial services apps, aims to raise up to US$1.3bn in its South Korean IPO. Kakao holds a...

Sumeet Singh

Asian Insurtech: The New Golden Child in Town?

A deep dive into 12 Insurtech companies in China, India, and Southeast Asia is presented in this Original. The key Insurtech trends and themes in...

Alec Tseung

Mobikwik IPO: Secure Enough?

Mobikwik has a diverse stream of payments and credit revenue, but it also suffers from a range of discomforts such as poor balance sheet health,...

Nitin Mangal

PB Fintech (Policybazaar) IPO Initiation: Insurance Policy

PB Fintech (operates Policybazaar and Paisabazaar platforms) is looking to raise Rs60.2 billion ($809 million) through an IPO in India. Overall, we...

Arun George

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