Digit IPO To Open On May 15; Issue Size Reduces

The initial public offering (IPO) of the insurance tech unicorn Digit Insurance is set to open next week on May 15 and close on May 17. As per the red herring prospectus (RHP) filed by the company, the anchor bidding for its IPO is starting on May 14.

Digit Insurance’s RHP shows that the startup’s IPO now comprises a fresh issue of shares worth INR 1,125 Cr and an offer for sale (OFS) component of 5.47 Cr.

It is pertinent to note that the insurtech company has reduced its IPO size significantly. Earlier, as per its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI), the IPO comprised a fresh issue worth INR 1,250 Cr and an OFS component of 10.94 Cr equity shares. 

The Fairfax and Peak XV-backed Digit Insurance first filed its draft papers for the IPO in August 2022. Soon after, SEBI put its IPO in ‘abeyance’. 

The market regulator had raised certain concerns about the company’s employee stock appreciation plans, which Digit Insurance addressed later and refiled a DRHP in March 2023.

In March this year, SEBI approved its DRHP.

Founded in 2017 by Kamesh Goyal, Digit offers insurance policies across verticals like health, motor vehicle, travel, property, and more. The startup is also backed by prominent names, including cricketer Virat Kohli and actor Anushka Sharma. 

At a time when the company is getting ready for its IPO, Insurance Regulatory and Development Authority of India (IRDAI) has imposed a penalty of  INR 1 Cr on the company for non-disclosure of a change in the conversion ratio of compulsorily convertible preference shares (CCPS).