Paisabazaar Faces IT Dept Scrutiny For Certain Vendors

Listed startup PB Fintech disclosed to the stock exchanges on Friday that its subsidiary Paisabazaar encountered visits from Income Tax (IT) officials earlier this week.

In a BSE filing, the fintech firm stated that the visits occurred on 13-14 December, focusing on specific vendors associated with Paisabazaar.

"We hereby inform you that the Income Tax officials visited Paisabazaar, a wholly owned subsidiary and PB Fintech on 13-14 December 2023 and enquired about certain vendors of Paisabazaar," the company disclosed.

PB Fintech assured that it provided the required information to the officials and is prepared to furnish further details as requested by the Department in the future. Additionally, the company reassured investors that Paisabazaar's business operations remain unaffected and are functioning normally despite the visits.

This development follows Securities and Exchange Board of India (Sebi's) imposition of a fine of Rs 1 Lakh on Paisabazaar about two months ago for employing a principal officer lacking the requisite qualification. The market regulator highlighted that Paisabazaar's CEO Naveen Kukreja, also the company's principal officer, did not possess the National Institute of Securities Markets (NISM) certification.

These recent visits coincide with Paisabazaar's substantial revenue growth and business expansion. In Q2 FY24, Paisabazaar recorded a revenue of Rs 154 Cr, contributing over 25 per cent to PB Fintech's core quarterly revenues.

During the September quarter, Paisabazaar's credit marketplace achieved an annual loan disbursal rate of Rs 16,600 Cr, with loans worth Rs 4,129 Cr disbursed on the platform in the three-month period.

Meanwhile, PB Fintech reported a loss of Rs 21 Cr in Q2 FY24, down over 89 per cent YoY, while witnessing a 42 per cent YoY surge in revenues to Rs 812 Cr during the same period.

The September 2023 quarter marked PB Fintech's third consecutive adjusted EBITDA-positive quarter, with consolidated EBITDA, excluding ESOP costs, reaching around Rs 13 Cr in Q2 FY24, a significant turnaround from the adjusted EBITDA loss of INR 53 Cr in the corresponding period last year.

Last month, PB Fintech's chairman and CEO, Yashish Dahiya, reiterated the company's commitment to achieve profitability starting from Q3 onwards.