Canadian billionaire Prem Watsa’s Fairfax Group-backed Digit Insurance has filed for draft papers with the market regulator Securities Exchange Board of India (SEBI) to raise funds through an initial public offer (IPO).
Go Digit Insurance’s IPO consists of a fresh issue of shares worth INR 1,250 crore, while existing shareholders will sell up to 109.4 million shares, as per the draft red-herring prospectus (DRHP).
The firm said it may sell around INR 250 crore of shares in a pre-IPO placement, therefore, share sale in the issue will be lower if the pre-IPO happens.
Go Digit Infoworks Services Private Limited, Nikita Mihir Vakharia, jointly with Mihir Atul Vakharia, Nikunj Hirendra Shah, jointly with Sohag Hirendra Shah and Subramaniam Vasudevan, jointly with Shanti Subramaniam are the promoter and other selling shareholders.
The company proposes to utilize the net proceeds to shore up its balance sheet and maintain cash reserves which the regulator requires of insurance companies.
Founded in 2017, Digit is trying to capitalize on India’s under-penetrated general insurance market along with users’ need for a better customer experience like easier claim settlements.
Digit founder Kamesh Goyal is a veteran of the insurance industry who worked with Germany’s Allianz and headed its Indian joint venture. Indian cricket star Virat Kohli is an investor and its brand ambassador.
The firm’s promoters are Kamesh Goyal, Go Digit Infoworks Services Private Limited, Oben Ventures LLP and FAL Corporation, which is part of Fairfax holdings.
Insurance regulator requires companies in the sector to be at least five years old before going public, which Digit will fulfil by September.
