Go Digit IPO Day 2: From financials to key risks, here are 10 things to know from RHP before subscribing

The retail investor response to the Go Digit General Insurance IPO throughout the two days of bidding has been overwhelmingly positive. Today is the IPO's second day, and the Virat Kohli-backed IPO strives to get fully booked. The non-institutional investor portion is getting subscribed to slowly and steadily, while qualified institutional buyers (QIBs) are yet to chip in. At 15:03 IST, Go Digit IPO subscription status is 57%, according to BSE data.

The subscription period for the Go Digit General Insurance initial public offering (IPO) is set for Wednesday, May 15, and it will end on Friday, May 17. For each equity share with a face value of Rs. 10, the price band has been set between ₹258 and ₹272.

The Go Digit General Insurance IPO consists of an offer-for-sale (OFS) of 54,766,392 equity shares by the promoters and other selling shareholders, together with a fresh issue of ₹1,125 crore.

The business will utilise the net revenues to fund the initiatives that are recommended to be supported by the net profits in addition to its usual commercial activities. The company hopes to gain from the equity share listing on stock markets as well, as it feels that this would enhance its reputation and brand recognition among present and potential customer.

go digit ipo day 2: from financials to key risks, here are 10 things to know from rhp before subscribing

Go Digit General Insurance IPO details.

Here are 10 key things from the Red Herring Prospectus (RHP) that investors might want to know before subscribing to the issue.

Go Digit IPO Promoters

According to the RHP, the company's promoters are Kamesh Goyal, Go Digit Infoworks Services Private Ltd, Oben Ventures LLP, and FAL. The promoters together held 729,565,220 equity shares, representing 83.30% of their company's pre-Offer issued, subscribed, and paid-up equity share capital on a fully diluted basis.

Go Digit General Insurance IPO Shareholders

Cricket player Virat Kohli purchased ₹2 crore for 2.67 lakh shares of the firm in 2020, while his wife, actress Anushka Sharma, invested ₹50 lakh through a private placement. ₹5 crore was invested in the firm by RS Filmcraft (OPC) Pvt. Ltd. through the RS SHA. Kapil Joshi made a ₹5.09 million investment in the firm through the KJ SHAs. Cornerstone made a ₹1.45 crore investment in the Company through the Cornerstone SHAs. UBR Capital contributed ₹1.53 crore to the business through the UBR SHAs. DTVPL made a ₹2.50 million investment in the company through the DTVPL SE.

Go Digit Infoworks Services Private Ltd, TVS Shriram Growth Fund 3, A91 Emerging Fund I LLP, Faering Capital India Evolving Fund II, Wellington Hadley Harbor AIV Master Investors (Cayman) III, Ltd, Faering Capital India Evolving Fund III, and Peak XV Partners Growth Investments III (formerly known as SCI Growth Investments III) are among the shareholders who hold 1% or more of the company's paid-up share capital.

go digit ipo day 2: from financials to key risks, here are 10 things to know from rhp before subscribing

Go Digit IPO shareholders details.

Go Digit IPO Peers

New India Assurance Company Ltd (P/E of 38.47x), Star Health and Allied Insurance Company Ltd (P/E of 53.79x), and ICICI Lombard General Insurance Company Ltd (P/E of 48.14x) are among the company's listed peers.

Go Digit General Insurance IPO Group Companies

FairbridgeCapital Private Ltd and Go Digit Life Insurance Ltd (formerly Go Digit Life Sciences Private Ltd) are the company's group businesses.

FairbridgeCapital Private, incorporated on June 30, 2011, is an indirect wholly-owned subsidiary of Fairfax Financial Holdings Ltd. It serves as Fairfax Financial Holdings Ltd's India-based investment advisor, identifying, reviewing, recommending, advising on, and facilitating the implementation of a diverse range of investment opportunities.

Go Digit Life Insurance, incorporated on December 16, 2021, is registered with the IRDAI to do life insurance business in India.

Go Digit IPO Business & Products

Go Digit General Insurance Limited, founded in December 2016, is an insurance company that offers vehicle insurance, health insurance, travel insurance, property insurance, marine insurance, liability insurance, and other insurance products that consumers may tailor to their own needs.

The company has presently launched 74 active items across all business areas. As of December 31, 2023, the firm has around 61,972 partners, including 58,532 POSPs and other agents.

As of December 31, 2023, the firm had distribution locations in 24 states and union territories across India. As of December 31, 2023, the firm had 473 active bots that automate work for functions and partners. As of December 31, 2023, the firm has 75 offices across India.

The company's core business plan was designed to reduce reliance on any particular line of activity. The firm provide a wide range of products to meet our customers' needs in auto, health, travel, property, marine, liability, and other insurance lines.

Go Digit General Insurance IPO Market Opportunity

The non-life insurance market in India, which as of 2023 had a nominal GDP of over US$3.7 trillion and ranked as the world's fifth biggest economy, is the company's main addressable market. India is expected to grow at the fastest rate among the top ten world economies ranked by current GDP, with a GDP per capita of US$5.94 trillion by the year 2028. This growth rate is based on the RedSeer Report, which the company exclusively commissioned and paid for in connection with the Offer.

Go Digit IPO Business Model

The firm focuses on making it easier for its customers to comprehend their goods and customise them to meet their specific demands and budgets. The firm uses front-end technologies that our clients are acquainted with to make it easier for them to file and track the status of claims.

On the back end, they leverage technologies built in-house to accelerate underwriting and claims processing. They also gather and utilise data to assist them better understand their consumers and reduce claims risks.

The key features of the business model include the following: Focus on accuracy in risk assessment and pricing. Efficient, scalable operational platform. Strong, reliable portfolio returns from a conservative investing strategy.

Go Digit General Insurance IPO Financials

Go Digit General Insurance Limited's revenue climbed by 113.35%, while profit after tax (PAT) increased by 112.01% between March 31, 2023 and March 31, 2022.

Go Digit IPO Key Risks

Some of the key risks are as follows;

- The firm has a track record of posting losses, and it may be unable to maintain profitability in the future. Their short working history makes it impossible to fully assess their future commercial prospects.

- Motor vehicle insurance products account for a significant portion of the company's sales and profits. Any restriction on the sale of these items owing to future changes in laws or client preferences, or any failure to maintain a successful portfolio mix of products, might have a substantial negative impact on their company, financial condition, operating performance, and prospects.

Lock-in of equity shares allotted to anchor investors

Anchor investors will have 50% of their equity shares locked in for 90 days from the date of allotment, while the remaining 50% will be locked in for 30 days.

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.

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