Delhi News

Insurer Go Digit’s Rs 2.6k cr IPO set to open on May 15


MUMBAI: Go Digit Insurance, a unicorn startup backed by Canadian billionaire Prem Watsa, is going public with a Rs 2,614-crore IPO that opens on May 15.
The company’s market value, at the upper end of the Rs 258-272 per share price band, will stand at Rs 26,438 crore or about $3.2 billion – a 17% discount to its last private valuation. It last raised capital in May 2022, when it issued 1.3 crore shares through private placement at Rs 328 per share.
Why the discount? Go Digit General Insurance chairman Kamesh Goyal said it was based on investment bankers‘ advice and that the company wanted to leave money on the table for investors.
The IPO, which will close on May 17, includes a fresh issue of shares worth Rs 1,125 crore, and an offer-for-sale of nearly 5.5 crore shares valued at Rs 1,489 crore on the upper end of the price band.


The company, which started operations in 2017 and turned a unicorn ($1-billion-plus valuation) in 2021, is jointly promoted by Prem Watsa’s Fairfax group and industry veteran Kamesh Goyal.
The IPO aims to raise funds to improve the company’s solvency margin. Solvency margins are the equivalent of capital adequacy in banking, and insurers have to scale up their capital along with the growth in business.
Go Digit’s promoters and shareholders will sell their stakes in the offer for sale. However, celebrity shareholders Virat Kohli and Anushka Sharma will not participate in the OFS. Goyal said the company has reduced the issue size as it has raised Rs 350 crore by way of tier-2 capital. He said there was potential for growth given that insurance penetration in India was only around 1% and Go Digit currently had a 3% market share.
As of Dec 31, 2023, there were 43.3 million customers or people availing insurance benefits under various policies issued by the company since inception. For the first nine months of FY24, Go Digit’s assets under management stood at 14,909 crore and gross direct premium stood at Rs 5,970 crore. According to a RedSeer Report, Go Digit’s gross written premium per employee for both the nine months ended Dec 31, 2023 and FY23 is highest compared to the average GWP per employee for non-life insurance companies in India.


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