Virat Kohli-backed Go Digit General Insurance is entering the primary market with an initial public offering (IPO) of Rs 2,614.65 crore. The offering consists of a fresh issue of 4.14 crore shares worth Rs 1,125 crore and an offer to sell 5.48 crore shares for Rs 1,489.65 crore.
Here are all the important things that you need to know.
1) IPO dates
The IPO will be open for subscriptions on May 15, 2024 and end on May 17, 2024.
2) Price Band
The price band for the issue has been set at Rs 258-272 per share.
3) Offer Details
The IPO consists of a fresh equity issue of Rs 1,125 crore and an offer to sell (OFS) of up to 5.47 crore shares. Under the OFS, promoter Go Digit Infoworks and other existing shareholders will sell their stakes in the company.
4) Objectives of the Issue
Go Digit intends to use the net proceeds to maintain its current company operations and to fund the proposed initiatives. Furthermore, the company believes that listing its equity shares on the public exchanges will improve its exposure and brand image among current and prospective customers.
5) Lot size
Investors may bid for a minimum of 55 equity shares and multiples thereof. Thus, retail investors' minimum investment would be Rs 14,190 (55 (lot size) x Rs 258 (lowest price band). At the top end, the bidding would rise to Rs 14,960.
6) Company Profile
Go Digit was founded in December 2016 and provides a variety of insurance products, including health, travel, and property insurance. The company has launched 74 active items across all business segments.
7) Finances of the Company
Go Digit recorded a net profit of Rs 1,290 crore for the nine months ended FY24, up significantly from Rs 100.21 crore for the same period in FY23. By the conclusion of FY23, the company's profit was Rs 355.47 crore. On the operational side, overall income for the first nine months of FY24 was Rs 1,308.32 crore, compared to Rs 124.19 crore in FY23 and Rs 392 crore for the entire fiscal year.
Despite this development, Go Digit reported an operational loss of Rs 101.2 crore for the nine months ended December 2024, an improvement over the Rs 570 crore loss for the same period in FY23 and the Rs 662.7 crore loss for the entire FY23.
8) Lead Managers
The book-running lead managers of the Go Digit IPO are ICICI Securities Limited, Morgan Stanley India Company Pvt Ltd, Axis Capital Limited, HDFC Bank Limited, Iifl Securities Ltd, and Nuvama Wealth Management Limited, with Link Intime India Private Ltd serving as the issue's registrar.
9) Key Risks
i) The company has a history of declaring losses, indicating that it may be unable to maintain profitability in the future. Its short working history makes it difficult to appropriately assess future commercial opportunities.
ii) Go Digit has previously received cautions, warnings, and show-cause notifications from the IRDAI for apparent noncompliance with several regulatory prescriptions. IRDAI has also levied penalties in certain situations, and it may face similar regulatory proceedings in the future.
iii) The company's sales and profitability are heavily reliant on auto insurance products. Any restrictions on the sale of these products, whether owing to future regulatory changes, adjustments in client preferences, or the company's failure to maintain a successful product portfolio mix, could affect the business.
10) List Date
The Go Digit IPO is likely to list on the BSE and NSE, with a tentative listing date of Thursday, May 23, 2024.
