A selloff in shares of India's online insurance sellers deepened on Friday as analysts pared earnings expectations after the industry regulator's proposal to cap commissions and management expenses.

Shares of Temasek-backed PB Fintech Ltd., seen as the most vulnerable to the changes, slid as much as 7.6%, after tumbling a record 36% the previous day. Those of smaller peer Turtlemint Fintech Solutions Ltd. sank 19%, following Thursday's 20% plunge. HSBC Holdings Plc and Dolat Capital Market Ltd. were among brokerages that lowered their ratings on PB Fintech, which relies heavily on commissions from insurance sales.

India is proposing bringing back product-specific commission limits for insurance amid growing public concern over rising premiums and the country's low insurance penetration. Manas Agrawal, an analyst at Sanford C. Bernstein India Pvt., wrote that the proposed framework implies a ~40% reduction in insurance take rates for PB Fintech, potentially reducing its fiscal 2028 revenue by about 36%.

Thursday's drawdown erased about $14 billion from the total market value of these firms. India's benchmark NSE Nifty 50 Index was up 0.1%, rebounding from yesterday's 1.6% slide.