Digit Insurance IPO: Indian insurance company Digit Insurance, which is backed by Canadian billionaire Prem Watsa’s Fairfax Group, is considering launching its first public offering, or IPO, soon, according to a report. According to the report, the Digit Insurance IPO will seek to raise $500 million, though the stock’s initial sale has remained shaky despite markets since early this year. Digit Insurance has Indian cricket icon Virat Kohli as its investor and brand ambassador. There is speculation that the company will submit its draft IPO documents later this year.
Digit Insurance IPO: everything you need to know
While the exact dates of Digit Insurance’s IPO are unknown, sources familiar with the development told Reuters that the company plans to submit its draft documents to market regulator Sebi by September this year and by January next year. to compile the list. The founder of Digit Insurance Limited, Kamesh Goyal, is a veteran of the insurance industry. He has several feathers in his crown for having worked with Germany’s Allianz and running its Indian joint venture.
According to the Reuters report citing anonymous sources, Digit has appointed Morgan Stanley and Indian investment bank ICICI Securities as bookrunners for the deal. However, none of the company’s representatives agreed to comment on the development. “Digit plans to raise money by offering new shares along with Fairfax, the largest shareholder at about 30%, to reduce its stake,” the sources told Reuters.
Digit will complete its five years as a company before going public, according to Sebi’s regulations. The Digit IPO is likely to be listed in January. The company’s fiscal year revenue increased 62 percent to approximately $675 million, surpassing the industry’s 11 percent increase. Digit Insurance posted a net loss of $7.8 million on revenue of $309 million in 2020/21, but the latest gains or losses could not be immediately identified, Reuters reported on the day.
Digit looks set to do business in India’s under-penetrated general insurance market, “along with users’ need for a better customer experience such as simpler claims handling”. The company was valued at nearly $4 billion last month as it finalized a financing tranche. “It has raised more than $400 million so far from Sequoia Capital, A91 Partners and Faering Capital, in addition to Fairfax,” the report said.
However, Digit Insurance’s IPO plans come at a time when Indian stock markets have been volatile for months. Earlier this month, India’s largest insurance company, LIC, was quoted at a discount on exchanges without moving forward. The IPO of the LIC did not reach the target valuations. On the other hand, IPOs of startups in India have also not fared well in the markets due to negative investor sentiment. Digit IPO performance depends on how much the company prices its shares, according to experts.
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