Axis Bank is in talks to buy 10% stake in Go Digit Life Insurance for $9 mn

• ByStartupStory     |    August 31, 2022

The decision comes after India’s largest private lender, HDFC Bank, announced last week in a stock exchange filing that it wanted to purchase a 9.94% share in Go Digit Life for up to 700 million rupees ($9 million). According to two sources with first-hand knowledge of the subject, Axis Bank in India is in talks to acquire a share in Go Digit Life Insurance, as the country’s third largest private lender wants to enter a rapidly developing insurance market.

According to the two sources, Axis is aiming to take a 10% interest in the start-up life insurance company for roughly $9 million, essentially valuing the business at $90 million. The decision comes after India’s largest private lender, HDFC Bank, announced last week in a stock exchange filing that it wanted to purchase a 9.94% share in Go Digit Life for up to 700 million rupees ($9 million).

Start-up Digit, which currently operates in general insurance, is expanding into the life insurance industry with its “Go Digit Life” endeavor. A Digit spokesperson declined to comment, stating that the company’s life insurance operation had not yet been licensed. Axis did not respond to a request for comment from Reuters.

Go Digit General Insurance. Digit’s general insurance division has a $4 billion valuation and is funded by Canadian billionaire Prem Watsa and Sequoia Capital. It provides coverage for health, travel, and automobiles. According to one of the insiders, Axis’ aspirations demonstrate private lenders’ rising interest in India’s lucrative insurance market, and the cooperation with Digit might help Axis accomplish its insurance objectives.

India’s life insurance market, the tenth largest in the world, is mostly unexplored. According to data from India’s insurance regulator, life insurance penetration, which is defined by the country’s life insurance premium as a percentage of its gross domestic product, increased to 3.2% in the fiscal year 2021, up only marginally from 2.15% two decades ago. While Axis presently offers some insurance products in collaboration with Max Financial, the Digit transaction, according to the source, may give Axis a deeper grasp of the online insurance business and allow it to strengthen outreach to insurance clients with its banking capabilities.

Insurance companies in India are rapidly enticing customers with online products that promise instant insurance issuance and simplified claims processing. Traditional insurance agents continue to be popular in India, particularly in rural towns. Go Digit General Insurance has filed plans to raise at least $440 million through an initial public offering, with a $5 billion valuation in mind. Its creator, Kamesh Goyal, is an industry veteran who formerly led Allianz’s India joint venture.

Follow Startup Story