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 Industry Overview Company overview Intrinsic Valuation Assumptions

INDUSTRY ANALYSIS
Industry Overview Health Insurance – Turnover (USDm) Segments contribution to the Sector
• The Health Insurance market in India is anticipated to
grow at a CAGR of 29% during the period 2021-25
• Favourable factors: Increase in middle-class population,
government support, awareness regarding benefits,
increased expenditure on healthcare
• Recent focus on provision of specialised health policies as
well as penetrating the market through the rural population
• Major players in this sector: ICICI Lombard General
Insurance Company, HDFC Ergo, SBI General Insurance,
among others
• In India, there is a trend of entry being high for private
health insurance players in the industry
• India has emerged as the 2° largest InsurTech market in
the APAC region
Industry growth depiction through the Industry Index Growth in Health Insurance sector (2017-18) Predicted turnover – uptil 2024

https://www.mordorintelligence.com/industry-reports/india-health-and-medical-insurance-market
 Industry Overview Company overview Intrinsic Valuation Assumptions

Value Propositions:
• Claim approval in 30 minutes
• Smooth process of admission and discharge
Headquarters:
Founding Team: • Free of cost pick and drop services for IPD
Khet Singh (CEO) • Discounted OPD, IPD, Diagnostic and Medicine
Gurgaon, Haryana
Ajit Kr. Paul (COO)
ClaimBuddy – An Overview STAGES
• India’s first Mediclaim support company 1. Share your case details
• B2C2C business model catering to patients and
hospitals File claim with expert
• One stop solution for hassle-free insurance claims
2. assistance
No. of employees: Revenue Model:
leveraging technology 50-60 Earning per
• Looking to invest in a pre-series-A investment processed claim 3. Get paid maximum money

KEY FINANCIALS INR 50 cr. 20% INR 17.5 Cr

Valuation after
Value of claims Growth rate per
Particulars Jan-June ‘21 processed so far month
pre-seed round
investment
Total Revenue 1,74,28,696

Cost of goods sold 49,43,384

Gross Margin 1,24,85,312

4000 MAJOR MILESTONES 72+
EBITDA 33,49,856
Claims processed Partner hospitals
in past 6 months across 5+ cities
https://claimbuddy.in/
 Industry Overview Company overview Intrinsic Valuation Assumptions

Annualised Growth rate 6% Estimated revenue over the period

Date of valuation: July ‘21
Monthly Growth Rate 0.004867551 ₹ 8,00,00,000
Company name: ClaimBuddy
₹ 6,00,00,000
Half Yearly Growth Rate 2.96%
₹ 4,00,00,000
PARTICULARS CURRENT YEAR ₹ 2,00,00,000
Country of incorporation India ₹-
Industry (US) Insurance (Life) 1 2 3 4 5 6 7 8 9 10 11 12
Gross Order Value ₹ 53,08,79,198.00
Revenues ₹ 1,74,28,696.00
Operating income or EBIT ₹ 33,49,856.00
PV (FCFF)
Do you have R&D expenses to capitalize? No
Do you have operating lease commitments? No 8000000
Effective tax rate = 30.00% 6000000
Marginal tax rate = 30.00% 4000000
The value drivers below:
2000000
Market share of ClaimBuddy: 0.1% 0
Indian insurance industry in 2020 ₹ 5,16,38,00,00,000.00
Growth rate for next year 2.96% -2000000 1 2 3 4 5 6 7 8 9 10
Growth rate in years 2-5 3.50% Revenue Invested Earned
Market Share for Claim Buddy in year 5 0.25% Drivers Income Premium
Revenues as percent of GOV in future 3.50% Invested Capital
Operating Margin for next year 20.00%
Target pre-tax operating margin (EBIT as % ₹ 6,00,00,000
of sales in year 10) = 35.00% Profitability Lever
₹ 4,00,00,000
Year of convergence 8.00 Speed of convergence level
Sales to capital ratio (next year) 1.50 Efficiency of Growth Lever ₹ 2,00,00,000
Sales to capital ratio (for years 2-5) = 2.50
Sales to capital ratio (for years 6-10) 3.00 Type of Risk Mitigation ₹0
Market numbers 1 2 3 4 5 6 7 8 9 10 11
Medicaid Medical & expense management
Riskfree rate 4.25%
Initial cost of capital = 12.00% Provider contracting & network VALUATION OUTPUT FEEDBACK
Medicare
changes
Other inputs Revenues in year 10, based on your revenue ₹
Do you have employee options outstanding? No Increased regulatory Selective participation in growth = 6,75,43,849
Number of options outstanding = 0.00 scrutiny favourable regions Pre-tax Operating Income in year 10, based on ₹
Average strike price = $0.00 Trends Product/ process changes your operating margin = 2,36,40,347
Average maturity = 0.00 Return on invested capital in year 10, based on
Standard deviation on stock price = 0.00% ACA related Communication with regulators your sales/capital ratio = 29.09%
 Industry Overview Company overview Intrinsic Valuation Assumptions

Jul- Dec 21 Jan-June 22 Jul- Dec 22 Jan-June 23 Jul- Dec 23 Jan-June 24 Jul- Dec 24 Jan-June 25 Jul- Dec 25 Jan-June 26 Jul- Dec 26
Jan-Jun 1 2 3 4 5 6 7 8 9 10 Terminal year
Indian Health
2.96% 3.50% 3.50% 3.50% 3.50% 3.65% 3.80% 3.95% 4.10% 4.25% 4.25%
Insurance Mkt Growth

₹ ₹ ₹ ₹ ₹ ₹ ₹ ₹ ₹ ₹ ₹ ₹
Total Health
5,16,38,00,00,0 5,31,64,57,49,2 5,50,25,33,50,4 5,69,51,22,17,7 5,89,44,51,45,3 6,10,07,57,25,4 6,32,34,34,89,3 6,56,37,25,41,9 6,82,29,92,57,3 7,10,27,35,26,9 7,40,46,01,51,8 7,71,92,97,08,300
Insurance
00.00 20.29 43.00 08.50 28.30 14.79 92.43 89.34 97.92 51.24 46.66 .15

Market Share 0.10% 0.13% 0.16% 0.19% 0.22% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25%
₹ ₹ ₹ ₹ ₹ ₹ ₹ ₹ ₹
₹ ₹ ₹
Gross Order Value 53,08,79,198.0 1,08,84,69,642. 1,30,00,89,471. 1,52,51,89,313. 1,58,08,58,723. 1,64,09,31,354. 1,70,57,48,143. 1,77,56,83,817. 1,85,11,50,379.
70,30,81,744.38 88,96,75,548.10 1,92,98,24,270.75
0 95 89 54 48 97 49 38 62
Revenue as % of GOV 3.28% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50%

₹ ₹ ₹ ₹ ₹ ₹ ₹ ₹ ₹ ₹ ₹ ₹
Revenues
1,74,28,696.00 2,46,07,861.05 3,11,38,644.18 3,80,96,437.50 4,55,03,131.52 5,33,81,625.97 5,53,30,055.32 5,74,32,597.42 5,97,01,185.02 6,21,48,933.61 6,47,90,263.29 6,75,43,849.48
EBIT (Operating)
19.22% 20.00% 23.75% 25.63% 27.50% 29.38% 31.06% 33.03% 35.00% 35.00% 35.00% 35.00%
margin
EBIT (Operating ₹ ₹ ₹ ₹ ₹ ₹ ₹ ₹ ₹ ₹ ₹ ₹ ₹
income) 33,49,856.00 49,21,572.21 73,95,427.99 97,62,212.11 1,25,13,361.17 1,56,80,852.63 1,71,82,796.80 1,89,68,576.09 2,08,95,414.76 2,17,52,126.76 2,26,76,592.15 2,36,40,347.32 2,02,90,491.32

Tax rate 30.00% 30.00% 30.00% 30.00% 30.00%30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00%
₹ ₹ ₹ ₹ ₹ ₹
EBIT(1-t) ₹ 23,44,899.20 ₹ 34,45,100.55 ₹ 51,76,799.60 ₹ 68,33,548.48 ₹ 87,59,352.82 ₹ 1,65,48,243.12
1,09,76,596.84 1,20,27,957.76 1,32,78,003.26 1,46,26,790.33 1,52,26,488.73 1,58,73,614.51
₹
- Reinvestment ₹ 47,86,110.04 ₹ 26,12,313.25 ₹ 27,83,117.33 ₹ 29,62,677.61 ₹ 26,26,164.82 ₹ 6,49,476.45 ₹ 7,00,847.37 ₹ 7,56,195.87 ₹ 8,15,916.20 ₹ 8,80,443.23 ₹ 78,40,583.42
2,74,13,845.56
₹ ₹ ₹ ₹ ₹
FCFF -₹ 13,41,009.49 ₹ 25,64,486.34 ₹ 40,50,431.15 ₹ 57,96,675.21 ₹ 83,50,432.02 ₹ 87,07,659.70
1,13,78,481.31 1,25,77,155.89 1,38,70,594.46 1,44,10,572.54 1,49,93,171.28
NOL ₹ 0.00 ₹ 0.00 ₹ 0.00 ₹ 0.00 ₹ 0.00 ₹ 0.00 ₹ 0.00 ₹ 0.00 ₹ 0.00 ₹ 0.00 ₹ 0.00 ₹ 0.00

Cost of capital 12.00% 12.00% 12.00% 12.00% 12.00% 11.39% 10.79% 10.18% 9.58% 8.97% 8.97%
Cumulated discount
0.8929 0.7972 0.7118 0.6355 0.5674 0.5094 0.4598 0.4173 0.3808 0.3495
factor
PV(FCFF) -1197329.9 2044392.812 2883016.887 3683891.892 4738259.386 5796053.533 5782795.165 5788150.146 5487954.563 5239813.416
Terminal cash flow 8707659.703
Terminal cost of capital 8.97% Implied variables After year 10
Terminal value 184484315.7 Sales to capital
PV(Terminal value) 64473577.65 1.50 2.50 2.50 2.50 3.00 3.00 3.00 3.00 3.00 3.00
ratio
PV (CF over next 10 years) 40246997.9 ₹ ₹ ₹ ₹ ₹ ₹ ₹ ₹ ₹ ₹ ₹
Sum of PV or Valuation of the Firm 104720575.5 Invested capital 3,50,00,000. 3,97,86,110. 4,23,98,423. 4,51,81,540. 4,81,44,218. 5,07,70,383. 5,14,19,859. 5,21,20,706. 5,28,76,902. 5,36,92,818. 5,45,73,262.
Probability of failure = 10.00% 00 04 29 62 22 04 49 86 72 92 14
Proceeds if firm fails = 52360287.77 ROIC 6.70% 8.66% 12.21% 15.12% 18.19% 21.62% 23.39% 25.48% 27.66% 28.36% 29.09% 8.97%
Value of operating assets = 99484546.77
Industry Overview Company overview Intrinsic Valuation Assumptions

ASSUMPTIONS

01 02 03
In stable growth, the firm will The firm will earn a return
have a cost of capital similar on capital equal to its cost The firm has no chance
to that of typical mature
companies (riskfree rate +
4.5%)
of capital after year 10. It is
assumed that the
competitive advantages of
of failure over the
foreseeable future. 07
today will fade over time.

04 05 06 We have
assumed that
EBIT = EBITDA
The effective tax rate is No losses are carried None of the cash is trapped
adusted to the marginal tax forward from prior years (in foreign countries) and
rate by the terminal year. If (NOL) coming into the that there is no additional
this assumption is overriden, valuation. A money losing tax liability coming due and
the tax rate will be that of the company may want to that cash is a neutral asset.
effective tax rate. override this.
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