HDFC, Axis Bank pick 9.94% stake each in Go Digit’s life insurance business
‘Go Digit Life’ is the latest venture of $400 million IPO-bound Go Digit General Insurance (Digit) as it looks to foray into life insurance market
Private sector lenders Axis Bank and HDFC Bank on Saturday said they have signed agreements to buy up to 9.94% stake each in Insurtech startup Go Digit Life Insurance Limited, for a total cash consideration of Rs 10.93 crore each.
‘Go Digit Life’ is the latest venture of $400 million IPO-bound Go Digit General Insurance (Digit) as it looks to foray into life insurance market. The new firm was incorporated in December, 2021, and was subsequently converted to a public limited company on May 10, 2022.
Go Digit Life is yet to receive a license (certificate of registration) from Insurance Regulatory and Development Authority of India (IRDAI) to carry out life insurance business.
Deal details
In separate exchange filings, the banks informed about the financial investment in the Canadian billionaire Prem Watsa and Sequoia Capital-backed company.
“Axis Bank has executed definitive agreements on April 21,2023 to invest an amount of up to Rs 69.90 crores in Go Digit Life in two tranches, subject to the terms and conditions set out in the definitive agreements,” the filing read.
The bank will pay Rs 10.93 crore as a part of first tranche (Initial Subscription) while it may “elect to invest Rs 58.97 crore in the second tranche post completion of the Initial Subscription, in accordance with the definitive agreements,” the filing read.
Sources had told Reuters, that the Digit deal may give Axis Bank a better understanding about the online insurance industry and allow it to improve outreach to insurance customers with its own banking offerings. It currently offers some insurance products in partnership with Max Financial.
Similar conditions and structure has been set out by HDFC Bank, which noted that the acquisition is likely to be completed within 3 to 6 months from the execution date.
Post the first tranche, the bank will hold 9.94% of equity share capital of Go Digit by acquisition of fully paid up equity share of face value of Rs 10 each.
Last valued at $3.5 million, unicorn insurtech firm Digit currently offers products in the motor, travel, property and health insurance segments under the brand name Go Digit General Insurance.
It is looking to raise $440 million through an IPO, which has been in a limbo after the markets regulator Securities and Exchange Board of India (SEBI) returned the offer documents in January due to certain compliance issues related to employee stock plans in a private letter.
Digit rectified the issues pointed out by SEBI and refiled the offer document in March.
(This story has been updated to correct typos)
MOST VIEWED STORIES
