Virat Kohli-backed Go Digit IPO Opens Today: All You Need To Know Before Subscribing It
Go Digit IPO: The initial public offering of Go Digit General Insurance Ltd, a firm backed by Virat Kohli-Anushka Sharma and Canada-based Fairfax Group, is opening on May 15. The 2,615-crore IPO, which will be closed on May 17, comprises fresh issuance of equity shares worth Rs 1,125 crore and an Offer-for-Sale (OFS) of 5.47 crore equity shares by promoter Go Digit Infoworks Services and existing shareholders worth Rs 1,490 crore.
Go Digit IPO: Subscription Dates, Allotment Date, Listing Date
The Go Digit IPO will remain open between May 15 and May 17. Its allotment will likely be finalised on May 21, while its listing will take place on both BSE and NSE on May 23.
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Go Digit IPO Price and Lot Size
The price of the Go Digit IPO has been fixed at a price band of Rs 258-272 per share.
Investors need to apply 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.
Go Digit IPO: Category-Wise Quota
The issue has been reserved up to 75 per cent for qualified institutional buyers (QIBs), 15 per cent for non-institutional buyers, and 10 per cent for retail investors.
Go Digit IPO GMP Today
According to market observers, unlisted shares of Go Digit General Insurance Ltd are trading Rs 47 higher in the grey market as compared with its issue price. The Rs 47 grey market premium or GMP means the grey market is expecting a strong 17.28 per cent listing gain from the public issue. The GMP is based on market sentiments and keeps changing.
‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.
Go Digit IPO: Risks
1) Go Digit has a track record of reporting losses.
2) The company has received warnings and show-cause notices from the insurance regulator IRDAI for alleged non-compliance with various regulatory prescriptions in the past.
3) Its revenues and profitability heavily depend on motor vehicle insurance products.
Go Digit: Should You Subscribe?
Giving ‘Subscribe long-term’ rating to the IPO, Astha Jain, research analyst at Hem Securities, said, “We are giving long-term subscription recommendation. Listing gain may or may not be there, based on the market conditions.”
Go Digit is digital full-time tech insurance firm. These are the companies that are controlled and licensed by regulatory authorities. However, they integrate technologies in their operations like claims management, underwriting. This company has a big market share among digital tech insurance companies, 82 per cent on the basis of gross premium.
“This company looks fine but the pricing is overvalued. It’s only due to this higher pricing that our recommendation is ‘subscribe’ but for long term. Listing gain may or may not happen.”
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Go Digit IPO: More Details
Go Digit’s IPO comprises fresh issuance of equity shares worth Rs 1,125 crore and an Offer-for-Sale (OFS) of 5.47 crore equity shares by promoter Go Digit Infoworks Services and existing shareholders worth Rs 1,490 crore. This takes the total IPO size to Rs 2,615 crore at the upper end of the price band.
At present, Go Digit Infoworks Services owns 83.3 per cent stake in the company. Proceeds from the fresh issuance have been proposed to be utilised for the augmentation of the company’s capital base and maintenance of solvency levels and general corporate purposes.
Cricketer Virat Kohli and his wife and actor Anushka Sharma are among the investors in the firm. They are not selling any share in the IPO. About 75 per cent of the issue size has been reserved for qualified institutional investors, 15 per cent for non-institutional investors and the remaining 10 per cent for retail investors. Investors can bid for a minimum of 55 equity shares and in multiples of 55 equity shares thereafter.
Go Digit offers motor insurance, health insurance, travel insurance, property insurance, marine insurance, liability insurance, and other insurance products, to meet the needs of the customers. It is one of the first non-life insurers in India to be fully-operated on the cloud and has developed application programming interface (API) integrations with several channel partners.
In March, Go Digit secured the approval from the Securities and Exchange Board of India (Sebi) to float the IPO. The company had first filed the draft red herring prospectus (DRHP) with the Sebi in August 2022, to raise funds through an initial share sale.
However, it was thwarted primarily due to certain compliance requirements pertaining to the employee stock appreciation rights scheme. Sebi returned Go Digit’s draft IPO papers on January 30, 2023 and asked the company to refile the documents with certain updates. Following this, the company again filed the preliminary IPO papers with Sebi in April 2023.
ICICI Securities, Morgan Stanley India Company, Axis Capital, HDFC Bank, Nuvama Wealth Management and IIFL Securities are book running lead managers to Go Digit’s IPO.
