 "Go Digit General Insurance")
Go Digit IPO review: Power couple Anushka Sharma and Virat Kohli-backed Go Digit is set to launch its initial public offering (IPO) on Wednesday, May 15, 2024. The IPO will remain open for three days, and will close on Friday, May 17, 2024.
The IPO of the Bengaluru-based insurance startup is a book-built issue, aiming to mop up Rs 2,614.65 crore.
The issue is a combination of fresh issue of 41.4 million shares, worth Rs 1,125.00 crore, and offer for sale (OFS) of 54.8 million shares aggregating to Rs 1,489.65 crore.
Here's all you need to know before subscribing to Go Digit IPO:
About Go Digit company
Go Digit is a Bengaluru-based full-stack digital insurance company offering motor, health, travel, property, marine, liability and other insurance products.
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The company provides customised insurance policies, and has launched a total of 74 active products across all its business lines so far.
Go Digit's Virat Kohli and Anushka Sharma connection
As per reports, Indian cricketer Virat Kohli bought 266,667 shares of Go Digit at Rs 75 each via private placement. This totalled to an initial investment of around Rs 2 crore.
Similarly, actor and producer, Anushka Sharma, invested Rs 50 lakh by acquiring 66,667 shares of Go Digit at Rs 75 per share.
The duo is not divesting their stake.
Go Digit IPO Anchor investors
Go Digit IPO Anchor investors
Go Digit raised around Rs 1,176 crore in its follow-on public offering from 56 anchor investors including Fidelity, Abu Dhabi Investment Authority (ADIA) and hedge fund Bay Pond Partners. The company allotted 43.2 million shares at Rs 272 apiece. READ MORE
Go Digit IPO price band
The price band of Go Digit's IPO has been fixed at Rs 258 to Rs 272 per equity share.
Go Digit GMP
Ahead of the opening of the IPO, grey market premium (GMP) stood at Rs 50, as per IPOWatch.com.
Go Digit issue size and objective
The IPO is a mix of fresh issue (worth Rs 1,125 crore), and an OFS (54.76 million equity shares)
The promoters intend to use the net proceeds from the IPO to carry out current business operations and support projects suggested by the net proceeds.
The company also aims to improve its brand awareness and image among current and prospective consumers.
Go Digit IPO allotment, listing dates
Investors who would apply for the IPO may receive allotment of shares on May 21, 2024.
Further, the shares of Go Digit may list on the NSE, and the BSE on May 23, 2024.
Go Digit IPO Lot size
The minimum lot size that investors can bid for are 55 shares and in multiples thereof.
Qualified Institutional Buyers (QIBs) can bid for up to 75 per cent of the issue; non-institutional investors (NIIs) can bid for up to 15 per cent of the issue; and retail investors can bid for 10 per cent of the issue.
Go Digit Financials
As per the company's red herring prospectus, Go Digit posted net profit of Rs 1,290 crore for 9MFY24, up from merely Rs 100.21 crore for the corresponding period of FY23.
Meanwhile, at the end of FY23, Go Digit had profit of Rs 355.47 crore.
On the operations front, total income for 9MFY24 sood at Rs 1,308.32 crore as against Rs 124.19 crore for 9MFY23 and Rs 392 crore.
Go Digit, however, posted an operating loss of Rs 101.2 crore for the nine months ended December 2024, narrowed down from Rs 570 crore for 9MFY23 and Rs 6622.7 crore in FY23.
Go Digit IPO Risks
>> The company has disclosed that it may not be able to maintain profitability in the future.
>> Its loss reserves are based on estimates as to future claims liabilities and if they prove inadequate, it could lead to further increases in reserves.
>> There are outstanding legal proceedings involving the company and their promoters and directors.
>> Changes in interest rates or adverse movements in the equity markets in India can impair the value of investment portfolio.
Go Digit IPO: Should you apply?
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Go Digit's financial performance has shown recent improvement, although they are still navigating operating losses. The insurance industry faces inherent risks, including stringent regulatory requirements and the potential for catastrophic events to significantly increase claim liabilities. Additionally, Go Digit has a high dependence on its motor vehicle insurance product.
Despite the aggressive valuation relative to recent earnings and operating losses, Go Digit's strong technological capabilities and its position in a growing market suggest potential for future profitability. Considering these factors, we recommend a subscribe rating for this IPO.
