Fairfax-backed Go Digit to raise Rs 1,250 crore through IPO

Fairfax-backed Go Digit to raise Rs 1,250 crore through IPO

Go Digit General Insurance, which is backed by Canada’s Fairfax Group and celebrity investor Virat Kohli, on Tuesday filed a draft red herring prospectus (DRHP) with markets regulator Sebi for a Rs 1,250-crore initial public offering (IPO).

The proposed IPO will also include an offer-for-sale (OFS) of up to 10,94,45,561 equity shares by the company’s promoter and existing shareholders, according to the DRHP. Under OFS, the promoter entity – Go Digit Infoworks Services – will sell 10,94,34,783 equity shares and remaining 6,778 equity shares will be put up for sale by existing investors in the startup.

Founded in 2016, Go Digit describes itself as a “full-stack” insurance company that leverages technology to sell a range of insurance covers across health, auto, travel and other kinds of commercial and non-life use cases. The company’s promoters include insurance industry Kamesh Goyal, who earlier worked with Allianz, Go Digit Infoworks Services, Oben Ventures LLP and FAL Corporation, which is a part of Fairfax Financial Holdings.

In April 2022, Go Digit appointed Jasleen Kohli as the new managing director (MD) and chief executive officer (CEO) of the company. Kohli took over from Vijay Kumar who held the position since the company was founded in 2017.

The startup has already raised around $580 million in funding from prominent investors such as Sequoia Capital India, IIFL Finance, TVS Capital, A91 Partners, Kunal Shah, among others. The insurer was last valued at around $4 billion in a financing round in May 2022.

In addition, Go Digit is also considering raising a pre-IPO placement of equity shares aggregating up to Rs 250 crore before the filing of the final red herring prospectus with the Sebi. If the pre-IPO placement is undertaken, then the fresh issue size may be reduced.

The company said that it would use the fresh proceeds from the proposed IPO for the augmentation of the company’s capital base and maintenance of solvency levels and general corporate purposes.

Go Digit reported a higher net loss of `295 crore for the financial year ended March 2022 (FY22), compared to a Rs 122-crore net loss in FY21 and a Rs 175-crore loss in FY20. The company’s total income, however, rose to Rs 3,841 crore in FY22 compared to Rs 2,251 crore in FY21.

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For GY22, Go digit’s gross written premium stood at `5,268 crore, compared to Rs 3,243 crore in FY21 and `2,252 crore in FY20, representing a CAGR of 52.9% from FY20 to FY22.

ICICI Securities, Morgan Stanley India Company, Axis Capital, Edelweiss Financial Services, HDFC Bank and IIFL Securities are the book-running lead managers for the issue.

Go Digit competes closely with other digital insurers such as Acko, which was last valued at $1.1 billion in a $255-million Series D fundraise in October 2021. Another insuretech company Policybazaar, which operates as an aggregator of insurance products, went public in November 2021 with a Rs 5,710-crore IPO.