Digit Insurance files a DRHP for an IPO of Rs 1250 crore
- ByStartupStory | August 17, 2022
Digit Insurance has filed the draught red herring prospectus (DRHP) for its Rs 1,250 crore first public offering with the Securities and Exchange Board of India (SEBI) (IPO). The IPO would include a 10.94 crore share offer for sale (OFS) from existing shareholders. “The proceeds from the issue will be utilized to supplement our capital base, expand our business, and improve our solvency margin and, as a result, solvency ratio,” the firm stated in the draft papers.
The IPO dates have not been stated by Digit Insurance in the draft prospectus. However, the IPO is unlikely to take place before October 2022, as the Insurance Regulatory and Development Authority (IRDAI) requires insurtech businesses to be at least five years old before going public. Because Digit Insurance was created in October 2017, it would be allowed to go public after October 2022, according to this rule.
The business may sell roughly Rs 250 crore of shares in a pre-IPO placement; if the pre-IPO occurs, share sales in the IPO will be lower, according to the DRHP. “If the pre-IPO placement is conducted, the amount of the new issue would be decreased to the extent of such pre-IPO placement,” it said. Nikita Mihir Vakharia, in collaboration with Mihir Atul Vakharia, Nikunj Hirendra Shah, in collaboration with Sohag Hirendra Shah, and Subramaniam Vasudevan, in collaboration with Shanti Subramaniam, would sell a share in the firm through an offer of sale.
Go Digit Infoworks now has a controlling share in Digit Insurance. Kamesh Goyal, Oben Ventures (Kamesh+Sameer Bakshi’s firm), and FAL Corporation (part of Watsa’s Fairfax Holdings) are among Go Digit Infoworks’ shareholders. Last year, Bengaluru-based Digit Insurance, which started its journey in October 2017 to market mostly car, travel, and property insurance, became a unicorn. It now sells insurance products in a variety of verticals and claims to have serviced over 20 million consumers in the auto, bike, health, and travel insurance categories.
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