Insurtech startup Go Digit's IPO to open for bids on May 15, close on May 17

Go Digit General Insurance will open its initial public offering (IPO) for subscription on May 15 and close on May 17. According to the Red Herring Prospectus (RHP), anchor investors can place their bids on May 14.

The insurance startup received approval for its IPO in March 2024 after delays due to compliance issues.

The IPO consists of a fresh issue of shares worth Rs 1,125 crore and an offer-for-sale (OFS) of up to 54,766,392 equity shares by promoters and existing shareholders. The IPO price band has been fixed at Rs 258 to Rs 272 per equity share with a face value of Rs 10.

Fund utilization

The company plans to use the funds to carry out its current business operations; and to carry out the projects that are suggested to be supported by the Net Proceeds. 

Virat Kohli and Anushka Sharma not selling shares

Indian cricketer Virat Kohli and actress Anushka Sharma, who are shareholders, will not be selling their shares in this offering.

In February 2020, Virat Kohli invested Rs 2 crore in the company to buy 2,66,667 equity shares for Rs 75 apiece.

On the other hand, Anushka bought 66,667 equity shares at the same price, investing Rs 50 lakh in the startup.

Considering the upper price band of Rs 272, the value of their total investment of Rs 2.5 crore will turn to Rs 9.06 crore, translating into a notional profit of Rs 6.56 crore.

Penalty and regulatory compliance

On May 4, the Insurance Regulatory and Development Authority of India (IRDAI) imposed a penalty of Rs 1 crore on Go Digit for non-disclosure of a change in the conversion ratio of compulsorily convertible preference shares (CCPS) issued to Fairfax-owned FAL Corporation.

Initially agreed as "1 CCPS for 2.324 equity shares," the ratio was later modified to "2.324 CCPS for 1 equity share." 

In response to the show cause notice issued by IRDAI in November, Go Digit acknowledged that it did not file a copy of the JV agreement amendment with the authority at the time of the change in August 2022.

The company cited inadvertent error and unintentional oversight. They later requested a personal hearing, which was withdrawn, asking IRDAI to adjudicate based on previous responses.

Who are the lead managers for IPO?

ICICI Securities, Morgan Stanley India Company, Axis Capital, HDFC Bank, Edelweiss Financial Services, and IIFL Securities are the book-running lead managers for Go Digit's IPO. Link Intime India has been appointed as the registrar. The shares will be listed on both the BSE and NSE.

Launched in 2016, Go Digit General Insurance offers motor, health, travel, property, and marine insurance and became India's first insurtech unicorn in 2021. With this IPO, the company aims to strengthen its position as a leader in the rapidly growing Indian insurance market.