Go Digit submits DRHP for IPO

16 Aug 2022 , 03:13 PM

The general insurance company Go Digit, which is supported by Fairfax Canada, has submitted its draught red herring prospectus (DRHP) in an effort to earn around Rs 5,000 crore through an initial public offering (IPO), which would also comprise a new issue of equity shares and an offer-for-sale.

For the first time in five years, a general insurer will be listed on the stock exchanges. The IPOs of New India Assurance and ICICI Lombard General Insurance took place in 2017. The organization, formerly known as Go Digit General Insurance, plans to raise Rs1,250 crores in new stock, with 109.4 million equity shares being offered for sale by the company’s promoters and selling shareholders.

Go Digit Infoworks Services Pvt Ltd, the company’s promoter and owner of around 86.35 percent of the company’s shares, would sell 109 million of them. Investors Subramaniam Vasudevan and Shanti Subramaniam will sell 3,000 equity shares, Nikunj Hirendra Shah and Sohag Hirendra Shah will sell 3,778 equity shares, and Nikita Mihir Vakharia and Mihir Atul Vakharia would sell up to 4,000 equity shares.

The proceeds from the new share offering will be used by the firm to increase its capital base, preserve solvency, and for other general corporate reasons.

The company, which is located in Bengaluru, offers general insurance for health, travel, property, liability, and other risks. In discussion with merchant bankers, it may take into account a pre-IPO placement of equity shares or any other strategy totaling up to Rs250 crores. According to it, the new issue size would be decreased if such placement is successful.

In FY22, it generated premium revenue of Rs5,268 crore. The firm collected premiums of Rs3,243 crore in FY21 and Rs2,252 crore in FY20. From FY20 to FY22, it generated a compounded annual growth rate of 52.9% in terms of premiums. Nevertheless, it recorded losses of Rs295.86 crore in FY22, Rs122.27 crore in FY21, and Rs175.24 crore in FY20.

Go Digit is a unicorn, which means that its valuation exceeds $1 billion. With 1,063 API integrations with partners and 16.57 million policies issued by partners with API integrations since its inception through March 31, 2022, it is one of the first non-life insurers in India to be fully operated on the cloud. It has also developed application programming interface (API) integrations with a number of channel partners.