InvestorQ : Why is Axis Bank buying a stake in Go Digit Insurance despite IPO kept in abeyance?
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Why is Axis Bank buying a stake in Go Digit Insurance despite IPO kept in abeyance?

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Neelam Naik answered.
2 months ago
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Axis Bank will be buying a 9.94% stake in Go Digit Insurance, although the IPO has been put in abeyance by SEBI. Normally, an IPO is put in abeyance if the company or its group companies are under some form of regulatory investigation or scrutiny. It is temporary. It has a marquee pedigree. Go Digit has the backing of Virat Kohli and Anushka Sharma as well as Fairfax of Canada, owned by Prem Watsa. Go Digit was founded by Kamlesh Goyal, the former CEO of Bajaj Allianz Insurance and who also has extensive international experience of working with Allianz AG in Germany.

Earlier, even HDFC Bank had bought 9.94% stake in Go Digit Insurance, approximate for similar valuations of up to Rs70 crore. This shows the potential of the insurance industry in India, especially the prospects of bancassurance. Digit Insurance is all about cloud based insurance origination and selling, which his what makes it unique and scalable and fits into the model of any existing large bank. GO Digit gets the benefit of the support of a much bigger balance sheet. It is almost like a fintech combination waiting to happen. Axis Bank may be looking to expand its insurance franchise through this acquisition.

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