SUMMARY
As per Go Digit’s draft red herring prospectus, its IPO will comprise fresh issue of equity shares worth INR 1,250 Cr
The company is also likely to consider a pre-IPO placement of equity shares aggregating up to INR 250 Cr
The Fairfax and Sequoia-backed startup filed its draft IPO papers on August 17
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Insurtech startup Go Digit General Insurance has bagged the approval from insurance regulator the Insurance Regulatory and Development Authority of India (IRDAI) to go public.
As per Go Digit’s draft red herring prospectus (DRHP), its IPO will comprise fresh issue of equity shares worth INR 1,250 Cr and an offer for sale (OFS) of 10,94,45,561 equity shares, CNBCTV18 reported. The company is also likely to consider a pre-IPO placement of equity shares aggregating up to INR 250 Cr.
Proceeds from the fresh issuance will be utilised for the augmentation of the company’s capital base, maintenance of solvency levels, and general corporate purposes.
The Fairfax and Sequoia-backed startup filed its draft IPO papers on August 17. However, the Securities and Exchange Board of India (SEBI) had kept its proposed IPO in ‘abeyance’.
While the market regulator said, “Issuance of observations kept in abeyance,” it didn’t give any other clarification or reason.
Founded in 2017 by Kamesh Goyal, Go Digit offers insurance policies across verticals such as health, property, motor vehicle, travel, and more. It claims to have served over 25 Mn customers as of March 31, 2022.
Go Digit is also backed by prominent names such as Virat Kohli and Anushka Sharma.
The company widened its net loss to INR 295.86 Cr in FY22 from INR 122.7 Cr in FY21. Its gross written premium (GWP) in FY22 stood at INR 5,268 Cr versus INR 3,243 Cr in FY21.
In August this year, HDFC Bank announced that it had signed an ‘indicative and non-binding’ term-sheet with Go Digit Life Insurance to invest INR 49.9 Cr to INR 69.9 Cr in two tranches in Go Digit Life Insurance for an equity stake of up to 9.94%.
In the booming fintech space of India, insurtech is expected to emerge as the second biggest sub-sector and is estimated to account for 26%, or $339 Bn, of the total addressable market value by 2025, according to Inc42 data.
The surge in both life and non-life insurance categories since the pandemic is driving the growth. It is pertinent to note that insurance penetration in India inched up 4.2% in FY21 from 3.76% in FY20, as per IRDAI data.
Go Digit General Insurance, a part of the promoter group of Go Digit General Insurance, competes with the likes of ICICI Lombard, Acko, Allied Insurance, among others.
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