Go Digit General Insurance Secures ₹1,176 Crore from Anchor Investors for Upcoming IPO

Go Digit General Insurance, a fast-growing insurance provider, has secured ₹1,176 crore ($141 million) in investments from a consortium of prominent anchor investors. This significant pre-IPO funding round signifies strong institutional backing for Go Digit’s upcoming public offering.

Board Approves Anchor Investor Allotment

The company’s board of directors passed a resolution to allocate 4,32,57,009 equity shares at a price of ₹272 per share to the participating anchor investors. Details gleaned from regulatory filings with the Bombay Stock Exchange reveal the identities of some key players involved. These include established financial institutions such as SBI, ICICI Prudential, Axis Mutual Fund, Mirae Asset, Tata Flexi, Motilal Oswal, PGIM India, and Edelweiss.

Domestic Mutual Funds Show Strong Interest

The filing further breaks down the allocation, highlighting that 11 domestic mutual funds, participating through 23 different schemes, received a collective allotment of 1,44,96,570 equity shares. This significant participation from domestic mutual funds underscores their confidence in Go Digit’s future prospects.

Public Offering Details and Recent Performance

Go Digit General Insurance launched its public offering on May 15th, 2024, with the offer period extending until May 17th. The price band for the IPO is set between ₹258 and ₹272 per share, with a minimum investment requirement of 55 shares.

The company’s Draft Red Herring Prospectus (DRHP) outlined plans to raise capital through a combination of fresh issue and offer for sale. The fresh issue component aims to raise ₹1,125 crore, while the offer for sale proposes to offload up to 5,47,66,392 existing equity shares.

Strategic Refinements and Regulatory Fines

Go Digit resubmitted its draft IPO papers in the previous year, with a subsequent reduction in the overall offering size. Notably, the Insurance Regulatory and Development Authority of India (IRDAI) recently imposed a fine on the company for delays in filing details related to a joint venture agreement.

Ownership Structure and Financial Performance

Go Digit Infoworks Services, the parent company, holds the largest ownership stake in the firm at 80.57%. TVS Shriram Growth follows with a 3.43% stake. Other notable investors include A91 Engineering (3.23%), Faering Capital (2.06%), and Peak XV (1.00%).

Go Digit’s financial performance has shown promising growth. During the nine-month period ending December 2023 (FY24), the company recorded a net revenue of ₹5,631 crore with a profit of ₹129 crore. This represents a significant improvement over FY23, where they reported a revenue of ₹5,909 crore and a profit of ₹35.5 crore.

Benchmarking Against Recent IPO

In comparison, travel technology firm TBO Tek raised ₹689 crore ($83 million) from its anchor investors last week. The company’s successful listing on the National Stock Exchange (NSE) on Wednesday, with a 55% premium over its issue price, serves as a positive benchmark for Go Digit’s upcoming IPO.