Go Digit General Insurance, India’s first insurtech unicorn as of 2021, is on the verge of a significant milestone with the scheduled launch of its IPO on May 15. This move comes after a burgeoning journey in the fintech arena, marking a significant public market debut for the technology-driven insurance firm. The IPO comprises a fresh equity issue of Rs 1,125 crore, coupled with an offer for sale (OFS) of 54,766,392 shares from existing stakeholders. A substantial part of this OFS will come from shares held by Go Digit Infoworks Services Private Limited, which currently owns an 83.3% stake in the company.The funds gathered from this public offering are intended to bolster Go Digit General Insurance’s capital reserves and aid in maintaining its solvency ratio, pivotal for its ongoing operations and growth initiatives. The IPO is scheduled to draw to a close on May 17, with the company navigating through the final preparatory stages.
Regulatory Hurdles Surmounted
In spite of its upward trajectory, Go Digit General Insurance confronted a regulatory roadblock, incurring a penalty worth Rs 1 crore imposed by the Insurance Regulatory and Development Authority of India (IRDAI). The penalty was levied due to an alleged non-disclosure of particulars concerning the conversion ratios of convertible shares. Nevertheless, the company has adhered to regulatory guidelines and remains steadfast in its progress toward the IPO.Cricket star Virat Kohli and actress Anushka Sharma, who are among the notable investors in Go Digit General Insurance, have opted to retain their shares, not listing them within the IPO offering. Their continued investment can be seen as a vote of confidence in the company’s value proposition and long-term prospects.Preparations Ahead of the IPO
Following a nod of approval from the Securities and Exchange Board of India (SEBI) in March, Go Digit General Insurance is all geared up for the IPO despite the hiccup. Although the company’s Draft Red Herring Prospectus (DRHP) filed with SEBI disclosed an adjustment related to initially agreed upon convertible cumulative preference shares (CCPS), it purportedly did not fully inform the regulator about the same.Such disclosures and the rectifications of processes highlight the company’s intent to ensure regulatory compliance and transparency, key aspects that market participants often scrutinize before an IPO. If successful, Go Digit’s public debut could reinforce the burgeoning potential of the insurtech sector in India and perhaps encourage subsequent fintech IPOs in the near future. As the launch date draws near, all eyes will be on Go Digit to see how it navigates the public market waters post its regulatory skirmish.
