InvestorQ : Why has SEBI not approved the IPO of Go Digit General Insurance?
ishika Banerjee made post

Why has SEBI not approved the IPO of Go Digit General Insurance?

2 weeks ago

Go Digit General Insurance Ltd, the company backed by Virat Kohli, Anushka Sharma and Prem Watsa of Fairfax Canada, had its IPO observations put under abeyance. Let me clarify that it is not like SEBI has not approved or denied approval to the IPO. The IPO is just under abeyance pending some more clarifications. It may be recollected that Go Digit had filed the draft red herring prospectus (DRHP) with SEBI in the middle of August and SEBI normally gives its observations (equivalent to approval) in the next 1 to 2 months.

What do we understand by IPO observations kept under abeyance? While SEBI has mentioned on the website that IPO observations are in abeyance, there is no reason assigned or explanation provided. However, if you go by the past cases like Biba, abeyance is when there is perhaps a cause for investigation either into the company or into a group company. Go Digit, an InsureTech company, originates and markets motor, health, travel, property, marine, liability and other insurance products on its cloud based platform.

The Go Digit IPO, as per the DRHP, will comprise of a fresh issue of Rs1,250 crore and an offer for sale (OFS) of 10.94 crore shares. Go Digit, which also counts HDFC Bank and Axis Bank among its investors, will use the fresh funds to bankroll growth and spruce up its core capital. For FY22, GO Digit reported revenues up 70% at Rs3,841 crore while AUM was up 68% at Rs9,398 crore. However, net losses for FY22 widened sharply to Rs296 crore and these losses are largely on account of front-loading of expenditure.