Shares of Policybazaar parent company PB Fintech are currently trading at Rs 386 apiece, down 61 percent from its initial public offering (IPO) issue price of Rs 980 apiece last year. Policybazaar has a market capitalization of around Rs 17,200 crore at present.

Online insurance aggregator Policybazaar will face Rs 560 crore of employee stock option (ESOP) expenses in FY23. The cost of ESOPs granted in October last year will reduce gradually over the next few years, the company said in an earnings call.

“In this quarter (Q2), we have had ESOP expenses of about Rs 173 crore. It might be just a shade over Rs 100 crore in the next quarter. So, that gives you an indication that ESOP expenses will start to decline rapidly,” said Policybazaar co-founder Yashish Dahiya. “If you look at FY26, the total ESOP expense for the year might be close to Rs 100 crore whereas it could be just Rs 50-60 crore in FY27.”

This is because of the way the company’s ESOP grants are structured and regulatorily mandated to be charged to the P&L statement. While 60 percent of the ESOP grants made in October 2021 need to be expensed by March 2023, the remaining 40 percent is expensed staggered over the next 3.5 years.

Policybazaar’s ESOP vesting schedule is distributed over five years, with 20 percent of the grants being vested each year. The company also said that an employee can exercise the stock options till five years after they vest.

Sources reported earlier that three top executives of the company – PB Fintech chairman and founder Yashish Dahiya, chief financial officer Alok Bansal, and policybazaar.com CEO Sarbvir Singh – were granted employee stock options (ESOPs) worth more than Rs 1,044 crore in FY22 when the company went public.

The company’s annual report showed that Yashish Dahiya got ESOPs of PB Fintech worth Rs 614 crore during the period, Alok Bansal received grants worth Rs 361 crore, and Sarbvir Singh Rs 69 crore. While Dahiya and Singh did not draw any other salary or allowances in FY22, Bansal drew Rs 1 crore.

Shares of Policybazaar parent company PB Fintech are currently trading at Rs 386 apiece, down 61 percent from its initial public offering (IPO) issue price of Rs 980 apiece last year. In the earnings call on November 7, Dahiya pointed out that the company’s Rs 1,079-crore revenue in the first half of FY23 was 5.3 times the revenue in the same period of FY19, and yet its valuation remained the same.

“A lot of people ask what happened during Covid – it came and went. As Covid is gone now, it is a good idea to compare the first halves of FY19 and FY23. We are now 5.3 times bigger,” said Dahiya. “Despite that, in a funny way, our valuation was (at that time) the same as it is today.”

Policybazaar has a market capitalization of around Rs 17,200 crore at present.