Fairfax Group backed Digit Insurance files for IPO- Here are the details!

Digit Insurance files IPO papers!

Digit Insurance files IPO papers

Digit Insurance is an Indian start-up based out of Bengaluru. It is an insuretech start-up, and it was founded in 2016 by Mr Kamlesh Goyal. It received approval from Insurance Regulatory and Development Authority (IRDA) in September 2017. The company is in the business of selling insurance online, but it has a product support staff to assist the customers. 

The toronto-based publicly listed company, Fairfax Financial Holdings, holds a 49% stake in the company. Also, Virat Kohli is the brand ambassador of the company, and he owns a stake in the company as well. Other promoters of the company include Mihir Atul Vakharia, Nikita Mihir Vakharia, Sohag Hirendra Shah, Nikunj Hirendra Shah, Shanti Subramaniam and Subramaniam Vasudevan. 

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IPO details of Digit Insurance

The fresh issue will be for Rs 1,250 Crores. The existing shareholders are expected to sell in the IPO as well via the Offer For Sale (OFS) mechanism. The total issue size is expected to be Rs 5,000 Crores. The company might raise Rs 250 Crores pre-IPO through private placement, and this might reduce the issue size. The company will utilize the cash to strengthen its balance sheet and meet the cash reserve requirements as prescribed by the regulators.

Kamlesh Goyal has experience working with the German Insurance giant Allianz Group, and he headed the Indian joint venture for the firm. The company is a loss-making firm as of now, and its net loss was Rs 295 Crores in FY 22. The loss in FY 21 was Rs 122 Crores. Also, the loss in FY 20 was Rs 175 Crores. But the total income of the firm is increasing, and it increased from Rs 2,251 Crores in FY21 to Rs 3,841 Crores in FY22.

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Regulatory requirements and valuation

As per the regulatory requirements, an insurance company must be functioning for five years before going public. Digit Insurance is expected to meet the requirements in September. When the company raised money in July last year, the company was valued at $3.5 billion. It raised $200 million from existing investors and new investors- Faering Capital, Sequoia Capital India and IIFL Alternate Asset Managers. The IPO managers will be ICICI Securities, Morgan Stanley, Axis Capital, HDFC Bank, IIFL Securities and Edelweiss Financial Services.

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Digit Insurance IPO

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