At the higher price band, the firm is expected to raise INR 2,614.6 crore. Digit Insurance has reserved 75% of the shares in the public offering for QIBs, 15% for NIIs, and 10% for retail investors. The bids for its IPO will close on May 17, and the business expects to be listed by the end of this month, on May 23.
Digit Insurance, the insurance tech startup, has established a price band of INR 258 to INR 272 per equity share for its planned initial public offering (IPO), which will open for bids next Wednesday (May 15).
At the higher price band, the firm is expected to raise INR 2,614.6 crore. Digit Insurance’s IPO consists of a fresh issue of shares worth INR 1,125 crore and an offer for sale (OFS) component of 5.47 crore shares.
Digit Insurance has reserved 75% of the shares in the public offering for qualified institutional buyers (QIBs), 15% for non-institutional institutional investors (NIIs), and 10% for individual investors.
The bids for its IPO will close on May 17, and the business expects to be listed on the BSE and NSE by the end of the month, on May 23.
Digit, founded in 2017 by Kamesh Goyal, provides insurance products in a variety of categories, including health, auto, travel, and property. Cricketer Virat Kohli and actor Anushka Sharma are among the investors in the firm, which also has Fairfax and Peak XV backing.
Digit Insurance intends to use the net proceeds from the IPO to maintain its solvency ratio in the fiscal year ending March 31, 2025 (FY25).
Speaking at a conference announcing its IPO, founder Goyal stated, “In insurance, we have to maintain solvency buffer… the minimum solvency ratio that insurance companies must maintain is 150%. As of December 31, we were at approximately 160%. With this capital increase, I believe we will achieve a 200% solvency ratio by May 31.”
“From the company perspective, in terms of AUM, cash flow, etc., we have enough money otherwise to invest either in product or tech,” said Goyal.
It is worth noting that Digit Insurance has drastically lowered the size of its first public offering. Previously, according to its draft red herring prospectus (DRHP) filed with the Securities and Exchange Board of India (SEBI), the IPO included a fresh offering worth INR 1,250 crore and an OFS component of 10.94 crore equity shares.
Digit Insurance originally filed draft IPO documents in August 2022. SEBI soon placed its IPO in ‘abeyance’.
The market regulator expressed concerns about the company’s employee equity appreciation schemes, which Digit Insurance resolved later by refiling a DRHP in March 2023.
SEBI authorized the DRHP in March of this year.
