Go Digit General Insurance IPO open on May 15, price band set at Rs 258-Rs 272 per share

Go Digit General Insurance will open its initial public offering (IPO) of equity shares on May 15, 2024, and close on May 17, 2024, with a price band set at Rs 258 to Rs 272 per equity share, each with a face value of Rs 10. The company plans to raise around Rs 2,615 crore from the IPO.

The IPO offering comprises a fresh issue of equity shares aggregating up to Rs 1,125 crore and an offer for sale of up to 54.77 million shares by promoters and other selling shareholders. The Anchor Investor Bidding will start on May 14, 2024.

Proceeds from the sale of fresh shares will be used by the company to improve the capital base and maintain solvency levels. The Insurance Regulatory and Development Authority of India (IRDAI) mandates insurance companies to maintain a solvency ratio of 150 per cent.

“The solvency ratio of the company currently stands at 160 per cent, and the fundraise will take the solvency ratio to over 200 per cent,” said Kamesh Goyal, founder and chairman, Go Digit General Insurance.

The company’s net profit in the nine months of FY24 increased to Rs 129 crore from Rs 10 crore in the nine months of FY23. As of December 31, 2023, the gross written premium (GWP) of the firm rose by 26.3 per cent year-on-year (Y-o-Y) to Rs 6,680 crore from Rs 5,288 crore in the nine months of FY23.

Goyal also stated that as the solvency improves, they will have more funds to invest beyond debt instruments. The insurer recently raised Rs 200 crore through non-convertible debentures (NCDs).

Out of the total net offer size, 75 per cent has been reserved for qualified institutional buyers (QIBs), 15 per cent for high-net-worth individuals (HNIs), and the remaining 10 per cent for retail investors.

Investors can bid for a minimum of 55 equity shares and in multiples of 55 shares thereafter.

ICICI Securities, Morgan Stanley India, Axis Capital, HDFC Bank, IIFL Securities, Nuvama Wealth Management, and Link Intime India are the book-running lead managers for the issue.

The promoter and promoter group includes Fairfax, GoDigit Infoworks, Kamesh Goyal, and Oben Ventures LLP. Post-listing, the promoter stake in the company will reduce to 75–76 per cent from the current 83 per cent.