Will Not Be The Long-Term Owner & Driver Of PB Healthcare: PB Fintech | CNBC TV18

Summary

In this interview, the Chairman and Group CEO of PB Fintech, Mr. Yashi Dya, discusses the company's healthcare venture, PB Health, and its plans to transform the healthcare industry with a subscription-based model. PB Fintech is investing around 6,700 crores and is partnering with other investors, although its stake will reduce over time. The company aims to improve consumer experience by offering unbiased advice and streamlined insurance claims, though profitability is not the primary focus. Mr. Dya shares insights into future growth projections, potential risks, and the challenges of regulatory changes in the insurance sector.

Takeaways

• 😀 The healthcare venture by PB Fintech aims to provide a unique family doctor service for health insurance customers, promoting unbiased advice.
• 😀 PB Fintech is investing about 2,000-2,500 crores in PB Health, with several financial investors backing the project.
• 😀 PB Fintech will reduce its stake in PB Health to around 25-26% after the first round of fundraising, with strategic investors taking a more significant role.
• 😀 While PB Fintech's investment in PB Health isn't purely financial, the primary motivation is improving customer experience and the health insurance ecosystem.
• 😀 PB Health will focus on building a narrower, more controlled network of hospitals, offering smoother claim experiences for consumers.
• 😀 PB Fintech doesn't plan to make further investments in PB Health in the short term, although future dilution is possible if more capital is raised.
• 😀 The objective for PB Health is to provide a great consumer experience, with profitability being a secondary concern in the short term.
• 😀 The venture has a 50% chance of success, with the potential for significant impact if successful, but a risk of failure as well.
• 😀 PB Fintech's core business has seen massive growth, expanding from 5,000 crores to 23,000 crores in premium sales in just three years.
• 😀 The market has concerns over PB Fintech's ability to outpace the industry growth rate, but they have grown 3-4 times the industry in recent years.
• 😀 Regulatory issues regarding commission caps for health insurance companies are a potential challenge, but PB Fintech's stake and management are not overly concerned about the matter.

Q & A

What is the primary goal of PB Fintech's healthcare venture?

The primary goal of PB Fintech's healthcare venture is to create a better experience for health insurance customers by offering a network of unbiased family doctors who advise consumers on their healthcare needs, without incentivizing unnecessary treatments or referrals.

When will PB Fintech roll out its healthcare venture and what is the expected timeline?

PB Fintech aims to have an operation ready by December, which is about five months after the cash commitments come in, expected by the end of July.

What is PB Fintech's strategy for establishing the healthcare venture's network?

PB Fintech plans to create a narrow network of hospitals, unlike the broad 14,000-hospital network currently in India. This will focus on a smaller, carefully selected group of hospitals to ensure smoother claims experiences for consumers.

What percentage of the healthcare venture will PB Fintech own after the first round of fundraising?

After the first round of fundraising, PB Fintech’s stake in the healthcare venture is expected to decrease to around 25-26%.

What is the expected role of PB Fintech in the long-term operation of the healthcare venture?

PB Fintech is not expected to be the long-term strategic driver or owner of the healthcare venture. It is seen more as an incubator and catalyst in the initial stages, with other investors taking a more active role in the long term.

Why is PB Fintech investing in the healthcare sector, given that the company is primarily focused on financial returns?

PB Fintech's investment in the healthcare sector goes beyond financial returns. It is driven by a strategic goal to improve the health insurance industry’s customer experience, which aligns with the company’s overall business objectives.

How is PB Fintech planning to address concerns about profitability in the healthcare venture?

PB Fintech acknowledges that the primary objective of the healthcare venture is not short-term profitability but to create a better consumer experience in the health insurance space. It is working to prove the concept first, and long-term profitability may follow once the model is successful.

What challenges does PB Fintech foresee for the healthcare venture?

PB Fintech sees a 50% chance of success for the healthcare venture, acknowledging that there are significant risks. However, if the project succeeds, it could be transformative for the health insurance market.

What kind of financial projections has PB Fintech made for the healthcare venture?

PB Fintech has shared basic projections with its board and investors, but the company is not publicly disclosing detailed financial projections at this stage. They are more focused on the long-term mission rather than short-term financial returns.

How does PB Fintech plan to raise more capital for the healthcare venture?

PB Fintech does not currently foresee investing further in the healthcare venture. However, if additional capital is needed in the future, it may raise funds from outside investors, which could lead to further dilution of its stake.