Go Digit IPO opens on May 15 as insurtech unicorn aims to maintain capital reserves

Go Digit General Insurance, backed by prominent investors including Fairfax Group of Canada, is set to launch its initial public offering (IPO) on May 15.

The company, which became India's first insurtech unicorn in 2021, will utilise the net proceeds from the IPO to maintain its solvency ratio and capital reserves.

The IPO, which will conclude on May 17, will see a blend of fresh issuance worth Rs 1,125 crore and stake dilution by existing shareholders, excluding notable personalities like Virat Kohli and Anushka Sharma who are expected to retain their investment in the insurtech firm.

The celebrity couple had received 3,33,334 shares worth Rs 10 each in February 2022.

The IPO includes an offer-for-sale component of up to 54,766,392 equity shares by the selling shareholders, of which up to 54,755,614 equity shares are proposed to be sold by one of the promoters, Go Digit Infoworks Services Private Limited, as per the Red Herring Prospectus.

Go Digit General Insurance is primarily owned by Go Digit Infoworks Services, holding an 83.3% stake in the company.

On May 4, Go Digit General Insurance faced a penalty of Rs 1 crore from Insurance Regulatory and Development Authority (IRDAI) due to non-disclosure of a change in the conversion ratio of compulsorily convertible preference shares (CCPS) issued to Fairfax-owned FAL Corporation, MoneyControl reported.

Its parent entity issued 78,00,000 CCPS instead of the initially agreed upon 63,00,000, altering the conversion ratio from "1 CCPS for 2.324 equity shares" to "2.324 CCPS for 1 equity share." While Go Digit disclosed this change in its JV agreement amendment and DRHP filing, it failed to provide full particulars to the regulator, breaching Section 26 of the Insurance Act.

The insurtech company had received approval from the market regulator Securities and Exchange Board of India (SEBI) for its IPO in March.

(The copy was updated to reflect the issuance size.)