News

Go Digit Insurance IPO Subscribed 3x Amid Strong Retail Interest

• ByStartupStory     |    May 17, 2024

The initial public offer (IPO) of Go Digit Insurance, a Bengaluru-based insurance firm, has seen significant interest as it enters its final day of subscription. As of 1:15 AM today, the IPO has been subscribed 2.97 times, driven largely by a strong push from retail investors.

The IPO, which opened on May 15, 2024, and is set to close today, aims to raise Rs 2,615 crore. This includes a fresh issue of 41.4 million shares worth Rs 1,125 crore and an offer for sale (OFS) of 54.8 million shares aggregating Rs 1,489.65 crore. Investors have the opportunity to bid within a price band of Rs 258 to Rs 272 per share.

Retail investors have shown robust enthusiasm, with their portion being oversubscribed by 3.35 times. Non-institutional investors (NIIs) have subscribed 2.17 times, while qualified institutional buyers (QIBs) have subscribed 3.23 times.

Despite this strong demand, the grey market premium (GMP) for Go Digit Insurance shares has decreased. As of today, the GMP stands at Rs 15 per share, down from Rs 45 on May 15 and Rs 50 on May 14, 2024.

On the second day of bidding, the IPO was 79% subscribed, with retail investors’ portion oversubscribed by 2.54 times, NIIs’ portion booked 73%, and QIBs’ portion booked 24%. The company has allocated 75% of the shares for QIBs, 15% for NIIs, and 10% for retail investors.

The IPO has also raised over Rs 1,176 crore from anchor investors, with 56 funds being allotted 43.2 million equity shares at Rs 272 per share.

Investment Prospects

Analysts are optimistic about the long-term prospects of Go Digit Insurance, highlighting the company’s investment in technology to enhance customer experience and improve operational efficiency. According to HEM Securities, Go Digit’s IPO, at the upper price band, commands a price-to-gross written premium (P/GWP) multiple of 3.44x based on annualized post-issue data from FY24 ending in September. They note that the company leverages advanced technology and predictive underwriting algorithms, supported by reliable distribution partners.

Comparatively, ICICI Lombard General Insurance Company Ltd. has a price-to-earnings (P/E) ratio of 48.14x, Star Health and Allied Insurance Company Ltd. has a P/E of 53.79x, and New India Assurance Company Ltd. has a P/E of 38.47x, positioning Go Digit as a competitive option in the insurance market.

Conclusion

As the Go Digit Insurance IPO concludes today, investors have a final opportunity to participate in what is seen as a promising long-term investment. The strong response from retail investors and the substantial funds raised from anchor investors underscore the market’s confidence in the company’s future growth and technological innovation.

Follow Startup Story