Virat Kohli-backed Go Digit Insurance has filed for an initial public offering (IPO) with markets regulator Securities and Exchanges Board of India. The company, backed by Candian billionaire Prem Watsa’s Fairfax Group aims to raise Rs 1,250 crore via the IPO.
According to a draft red herring prospectus (Drhp) filed with Sebi, the IPO will also consist of an offer-for-sale (OFS) of 10.94 crore shares for an undisclosed amount, by existing promoters and selling shareholders.
Promoters will trim their stake via the IPO - Go Digit Infoworks (up to 10.9 crore shares); Nikita Vakharia and Mihir Vakharia (up to 4,000 shares); Nikunj Shah and Sohag Shah (up to 3,778 shares); Subramaniam Vasudevan with Shanti Subramaniam (up to 3,000 equity shares).
The proceeds from the fresh issue will be utilized for the augmentation of Go Digit’s capital base and maintenance of solvency levels. The new age insurer claims a rise of 68% in its FY22 assets under management (AUM), to Rs 9,393.8 crore from Rs 5,590.1 crore in FY21.
The company is also in consultation with merchant bankers for a pre-IPO placement of equity shares, or any other method aggregating up to Rs 250 crore. Should such a placement occur, the fresh issue size will be reduced, the Drhp added.
Founded in 2017, Go Digit offers motor, health, travel, property, marine and liability insurance and claims to be one of the top 10 private general insurers by gross written premium (GWP) in FY20 and FY21.
The Bengaluru-based company counts marquee investment houses like Sequoia Capital, A91 Partners, Faering Capital, TVS Capital, among its list of investors.
ICICI Securities, Morgan Stanley India, Axis Capital, Edelweiss Financial, HDFC Bank and IIFL Securities are the book running lead managers for Go Digit’s IPO.
Insurance regulator IRDAI requires companies to be at least 5 years old before listing on stock exchanges. Go Digit turns 5 next month.
The insurtech platform became the first startup to turn unicorn in 2021, on January 15, and will be the second new age insurance company after PB Fintech-owned PolicyBazaar, to list on bourses.
A unicorn is a privately help startup with a valuation of $1 billion or more.
According to the Drhp, its gross written premium for the FY22 period stood at Rs 5,268 crore, a growth of 38.4% from Rs 3,243 crore in FY21. Its net expense ratio has decreased to 38.7% in FY22 from 35.4% in FY21 and claims to have a strong capital position with a solvency ratio of 2.01 as of March 31, 2022.
IRDAI mandates a minimum solvency ratio of 1.5 for any insurer.
As per Go Digit’s financial highlights for the FY22 period, the company’s net loss for the year more than doubled to Rs 295 crore versus Rs 121 crore during the previous year whereas its total income rose nearly 41.4% to Rs 3,841 crore versus Rs 2,251 crore in FY21.
