Digit IPO: Public Issue Receives Muted Response On Day 1

Go Digit Shares Jump 8% Intraday On Robust Q1 Results

SUMMARY

The IPO saw the greatest interest from retail investors, with the portion reserved for them subscribed 1.44X subscription

QIBs placed bids for 58,960 shares as against 2.88 Cr shares on offer, while the NII portion saw 0.34X subscription

Digit is looking to raise INR 2,614.6 Cr via the IPO at the upper end of the price band, which is set at INR 258-272

The initial public offering (IPO) of insurtech major Go Digit General Insurance (Digit) was subscribed 0.36X on the first day of the bidding on Wednesday (May 15).

According to the BSE data, the public issue received bids for 1.89 Cr shares as against 5.28 Cr shares on offer. The subscription for the IPO will close on May 17.

The IPO saw the greatest interest from retail investors, who placed bids for 1.38 Cr shares as against 96.12 Lakh shares reserved for them, resulting in a 1.44X subscription.

However, the rest of the categories saw muted demand. In this, the lowest interest came from qualified institutional buyers (QIBs), who placed bids for 58,960 shares as against 2.88 Cr shares reserved from them. Similarly, non-institutional investors (NIIs) quota saw 0.34X subscription, receiving bids for 49.73 Lakh shares against 1.44 Cr shares on offer.

It is pertinent to note that 75% of the shares of Digit’s public issue have been reserved for QIBs. The remaining 15% and 10% are reserved for NIIs and retail investors, respectively.

The startup plans to raise INR 2,614.6 Cr via the IPO at the upper end of the price band, which is set at INR 258-272. The public issue comprises a fresh issue of shares worth INR 1,125 Cr and an offer for sale (OFS) element of 5.47 Cr shares.

The company plans to use the fresh proceeds from the IPO to maintain its solvency ratio in the financial year ending March 2025 (FY25).

On Tuesday, the startup said it raised INR 1,176.6 Cr from its anchor investors by allocating 4.32 Cr shares to them.

“The board of directors of the company at its meeting held on Tuesday (May 14, 2024) has finalised the allocation of 4.32 Cr equity shares to anchor investors at… price of INR 272 per equity share (including share premium of INR 262 per share)…,” the company said in a filing with the BSE.

This is Digit’s second stab at public listing. The company first filed its draft red herring prospectus (DRHP) in 2022. However, the Securities and Exchange Board of India (SEBI) had kept the IPO in ‘abeyance’ over certain concerns about the company’s employee stock appreciation plans”.

Later, the startup refiled its IPO papers in March 2023.