Virat Kohli-backed Go Digit General Insurance is tapping the primary market with its Rs 2,614.65 crore initial public offer (IPO). The issue is a mix of fresh issue of 4.14 crore shares worth Rs 1,125 crore and an offer for sale of 5.48 crore shares worth Rs 1,489.65 crore.
Here are all the key details you need to know
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1) IPO Dates
The IPO will open for subscription on May 15, 2024 and close on May 17, 2024.
2) Price Band
The price band for the issue has been fixed at Rs 258-Rs 272 per share.
3) Offer Details
The IPO comprises a fresh equity issue of Rs 1,125 crore and an offer for sale (OFS) of up to 5.47 crore shares. Under the OFS, promoter Go Digit Infoworks and other existing shareholders will offload their stake in the company.
4) Objectives of the Issue
Go Digit plans to utilise the net proceeds to support its current business operations and to finance the proposed activities identified for funding. Additionally, the company anticipates that listing its equity shares on the stock exchanges will enhance its visibility and brand image among both existing and potential customers.
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5.) Lot Size
Investors can bid for a minimum of 55 equity shares and in multiples thereof. Hence, the minimum investment by retail investors would be Rs 14,190 (55 (lot size) x Rs 258 (lower price band)). At the upper end, the bidding amount will increase to Rs 14,960.
6) Company Profile
Incorporated in December 2016, Go Digit is an insurance provider offering various products such as health, travel and property insurance. The company has launched a total of 74 active products across all its business lines.
7) Financials of the Company
Go Digit reported a net profit of Rs 1,290 crore for the nine months ended FY24, a significant increase from Rs 100.21 crore for the same period in FY23. By the end of FY23, the company’s profit stood at Rs 355.47 crore. On the operational side, total income for the first nine months of FY24 was Rs 1,308.32 crore, compared to Rs 124.19 crore for the corresponding period in FY23 and Rs 392 crore for the full fiscal year.
Despite this growth, Go Digit posted an operating loss of Rs 101.2 crore for the nine months ended December 2024, an improvement from the Rs 570 crore loss for the same period in FY23 and the Rs 662.7 crore loss for the entire FY23.
8) Lead Managers
ICICI Securities Limited, Morgan Stanley India Company Pvt Ltd, Axis Capital Limited, Hdfc Bank Limited, Iifl Securities Ltd and Nuvama Wealth Management Limited are the book-running lead managers of the Go Digit IPO, while Link Intime India Private Ltd is the registrar for the issue.
9) Key Risks
i) The company has had a track record of reporting losses and suggests that it may not be able to maintain profitability in the future. Its limited operating history makes it difficult to accurately evaluate future business prospects.
ii) Go Digit has received cautions, warnings and show-cause notices from the IRDAI due to alleged non-compliance with various regulatory prescriptions in the past. IRDAI has also imposed penalties in certain cases, and it may be subject to such regulatory actions in the future.
iii) The company’s revenues and profitability heavily depend on motor vehicle insurance products. Any limitations on the sale of these products, whether due to future regulatory changes or shifts in customer preferences or the company’s inability to maintain a profitable product portfolio mix, could harm the business.
10) Listing Date
The Go Digit IPO will likely list on the BSE and NSE with the tentative listing date fixed as Thursday, May 23, 2024.
