InvestorQ : What is your take on the proposed IPO of Go Digit Insurance?
vaishnavi mhatre made post

What is your take on the proposed IPO of Go Digit Insurance?

vidhya Laxmi answered.
2 months ago

The latest IPO filing has been by Go Digit Insurance. This general insurer company is backed by Fairfax of Canada, the investment company owned by Prem Watsa. Go Digit has filed its draft red herring prospectus (DRHP) for the proposed IPO and the approvals are expected to come in around the next 2 to 3 months. However, general insurers have not had a great show on the bourses. In 2017 New India and GIC Re came out with mega IPOs but disappointed in post listing performance and are nearly 85% down from the IPO price.

The other general insurer, Star Health and Allied Insurance, is backed by Rakesh Jhunjhunwala. However, they had a rather bad start becoming the only public issue in 2021 to get undersubscribed with a forced reduction in the issue size. However, the post listing performance of Star Health has also been far from satisfactory as it has struggled under the issue price of last year. Hence GO Digit would start off the IPO quest with a disadvantage.

In terms of IPO details, the IPO size will be Rs5,000 crore overall, out of which the fresh equity issue portion will be Rs1,250 crore and the balance Rs3,750 crore will be accounted for by an offer for sale (OFS). Promoters will also take partial exit from their holdings in Go Digit. GO Digit will use the fresh issue proceeds to augment capital and maintain solvency. Go Digit provides health, travel, property, marine, liability and other general insurance products. It largely leverages the digital platforms for selling insurance products.