Go Digit IPO: Insurtech Unicorn Refiles DRHP To Address SEBI Concerns

Insurtech unicorn Go Digit General Insurance on Thursday (March 30) refiled draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for its $440 Mn initial public offering (IPO). 

The Bengaluru-based startup, which first filed its DRHP in August last year, refiled the IPO papers to address the concerns raised by the markets regulator about its employee stock appreciation plans. 

In the latest filing, Go Digit said its erstwhile Go Digit – Employee Stock Appreciation Rights Plan, 2018 has been amended and changed to ESOP 2018, pursuant to the resolutions passed by the board and shareholders on March 21, 2023 and March 27, 2023, respectively. 

Its Employee Share Purchase Scheme 2021 has also been annulled pursuant to the resolutions passed by the board and shareholders on March 21, 2023 and March 27, 2023, respectively, as per the latest DRHP. 

An email sent to Go Digit with questions on its refiled DRHP did not immediately elicit a response. The story will be updated on receiving a response from the company.

Reuters was the first to report on the development.

It is pertinent to note that SEBI put Go Digit’s proposed IPO in ‘abeyance’ in September last year. As per a Reuters report earlier this year, SEBI said that the startup was ‘not eligible’ for an IPO over concerns around the issuance of stock appreciation rights to its employees.

Through stock appreciation rights, a company’s employees can earn a bonus equal to the appreciation in the value of the company’s stock over a period of time. However, SEBI prohibits the grant of such employee options for companies going public. 

Go Digit’s IPO comprises a fresh issue of shares worth INR 1,250 Cr and an offer for sale (OFS) of 109.45 Mn shares. 

Founded in 2017 by Kamesh Goyal, Go Digit offers insurance policies across verticals like health, motor vehicle, travel, property, and more. It is also backed by prominent names such as Sequoia, Prem Watsa’s FairFax Asia, cricketer Virat Kohli, and actor Anushka Sharma. 

In FY22, its loss widened 141% year-on-year (YoY) to INR 295.8 Cr. Operating revenue stood at INR 5,267.6 Cr in the year as against INR 3,243.4 Cr in FY21.

The latest development comes at a time when a number of Indian startups, including Droom, PharmEasy, MobiKwik, have either put their IPOs on hold or withdrawn their DRHPs due to the volatility in the global equity market and negative investor sentiment.

Go Digit competes against the likes of Acko, ICICI Lombard, Bajaj Allianz, Tata AIG, and more.

As per an Inc42 report, the country’s insurtech market is projected to reach a size of $307 Bn by 2030, growing at a compound annual growth rate (CAGR) of 17% during 2022-2030.