Sebi clears Go Digit Insurance’s IPO

Mumbai: Market regulator Sebi is understood to have cleared an initial public offer by Go Digit General Insurance, promoted by Canadian billionaire Prem Watsa’s Fairfax group and industry veteran Kamesh Goyal.
The last round of fund raised by the company valued it at $3.5 billion in 2021, when it raised $200 million from existing investors Faering Capital and new ones, including Sequoia and IIFL Alternate Asset managers.The general insurance company had raised over Rs 3000 crore. The holding company has an 83% stake in the insurance company.
The company had filed for an IPO in August 2022. However, Sebi had kept the issue in abeyance after raising queries on the company’s employee stock appreciation plan. Sebi's objection led to the company refiling for its Rs 3500 crore IPO.
Sebi had queries on the company’s Go digit – Employee Stock Appreciation Rights Plan, 2018, which was subsequently replaced with an Employee Stock Option Plan by the company last year. The stock appreciation plan linked employee bonuses to the performance of the company’s shares, which is not permitted. The company also annuled its Employee Share Purchase Scheme 2021.
In the private sector, ICICI Lombard General Insurance, which has a 8.8% market share, has a market capitalisation of Rs 81,000 crore. Stand alone health Insurer Star Health, which has a 4.9% market share of the premium, has a market cap of Rs 33134 crore. However, both these insurers have a large retail franchise.
Go Digit is among the youngest insurers, having been founded in 2017. In addition to the private equity firms, cricketer Virat Kohli and his actress wife Anushka Sharma were shareholders.
The company reported a net profit of Rs 107 crore for the nine months ending December 2023, which is compared to Rs 10 crore for the same period last year.
The company had a gross written premium o fRs 7317 crore as of December 2023. According to regulatory filings, Go Digit Insurance recorded a gross domestic premium income of Rs 6645 crore up to January 2024 in FY24, a 32% growth over the same period last year. The company has a market share of 2.76% in the non-life sector.