Info Edge is the first ever company to invest in an online insurance aggregator, Policy Bazaar. Now, as a result of recent funding rounds by Policy Bazaar which managed to raise INR 225 crore i.e. more than $40 million, Info Edge has informed the parent company of Policy Bazaar, eTechAces Marketing and Consulting Pvt. Ltd, that its stake in this online insurance aggregator company is currently only 18 percent.
In a report submitted by Info Edge to the BSE, it also mentioned that this recent multi- crore funding was provided to Policy Bazaar by PremjiInvest as well as couple of other new as well as existing investors. Some of these investors include Ribbit Capital, ABG Capital, Tiger Global and Steadview Capital.
It is to be noted that at the end of the Financial Year 2015 i.e. on 31 March 2015, Info Edge used to own a total of 23 percent of the capital of Policy Bazaar’s parent company, eTechAces Marketing and Consulting Pvt. Ltd.
Previous reports show that so far, Policy Bazaar has received a total funding of INR 32.5 crore from Info Edge. This includes INR 20 crore invested in the month of September 2008, INR 10 crore invested in the month of April 2011 as well as INR 2.5 crore invested in the month of April 2013. It is to be noted that Info Edge did not participate in the most recent round of funding in Policy Bazaar. This recent round of funding took place in the month of May 2014. Until this time, Info Edge had a total of 32 percent stake in Policy Bazaar. As a result of not participating in May 2014 round of funding, its stakes got diluted to a total of 23 percent from the existing 32 percent.
These reports also show that there has been a considerable plunge in Info Edge’s stakes in Policy Bazaar because in the beginning, Info Edge held a total of 49 percent stakes of this online insurance aggregator company.
In January last year, Policy Bazaar made a crucial announcement when it exceeded the FDI limit of 26 percent as set by IRDA (Insurance Regulatory and Development Authority) to a total of 38 percent for its company. This was due to the foreign investors who owned 38 percent of stakes in the company. Interestingly, Info Edge was the only Indian investor which Policy Bazaar had at that point of time.
Only last month, the Indian government passed its insurance bill which approved up to 49 percent of FDI in Indian companies. Despite of the fact that a foreign investment of 49 percent is also allowed, this insurance bill also makes it very clear that the right to management control will always lie in the hands of Indian national investors only.
This is a great step taken by the government in order to ensure that more and more companies like Policy Bazaar manage to raise foreign investments without facing any regulatory issues.
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