Insurance company Go Digit’s IPO papers have been returned by SEBI: the company must re-fil in 2023.

Insurance company Go Digit’s IPO papers have been returned by SEBI: the company must re-fil.

The preliminary IPO papers of Canadian Fairfax Group-backed startup Go Digit General Insurance Ltd. were rejected by the market surveillance authority Sebi. The company is attempting to resubmit the documents with different information.

According to an update with Sebi, the market regulator returned the draft papers on Jan. 30.

Go Digit General Insurance submitted a draft red herring prospectus (DRHP) to the Securities and Exchange Board of India (SEBI) in August last year in preparation for its initial public offering (IPO). The IPO consists of a new issue of shares at Rs. 1,250 crore and an offer to sell (OFS) of 10,94,45,561 equity shares by the promoter and existing shareholders.

The company wanted to use it for general corporate purposes, improve its capital base and maintain solvency levels. The book-running lead managers of the offering were ICICI Securities, Morgan Stanley India Company, Axis Capital, Edelweiss Financial Services, HDFC Bank and IIFL Securities.

The insurance company issued a statement stating that the DRHP (Draft Red Herring Prospectus) had been returned in accordance with the ICDR (Issuance of Capital and Disclosure Requirements) rules by Sebi, the rights under those in force at the time Exempt Employee Stock Option Plans The draft prospectus has been filed but does not exempt employees’ stock appreciation rights.

The company said it is now analyzing changes to its employee stock appreciation program and will promptly resubmit its DRHP to Sebi.

According to the draft papers, it was proposed to use the money raised from the re-issuance for general business purposes, increasing the company’s capital base and maintaining solvency levels.

How does SEBI approve companies to go public?

Normally a weekly update on the IPO development is provided by the Securities and Exchange Board of India (SEBI) where the companies submit their Draft Red Herring Prospectus (DRHP). The SEBI reviews the documents and seeks clarifications where necessary before finalizing their approval and listing.

Because many companies get an IPO but don’t use it properly and generate no profits for investors, SEBI tightened IPO norms and made changes to the way IPOs would be approved.

The capital markets regulator Securities & Exchange Board of India (Sebi) has announced decisive measures to encourage more initial public offerings (IPOs) at a time when around 100 companies are preparing to enter the equity markets via IPOs.

While Sebi has tightened disclosure requirements for companies looking to go public, it has opened up a new avenue for companies to initially submit the offering document with a limited amount of information, and to disclose sensitive information after the actual IPO process.

This helped allay concerns from market participants and industry players that the draft offering contains a lot of sensitive information about the company and that while the company is unable to complete the IPO, the disclosures could sometimes harm the company’s growth prospects. Interestingly, there have been many instances where companies have submitted the draft document and then had to pause the offering due to market conditions.

Sebi has further tightened disclosure requirements, particularly for key performance indicators (KPIs) based on recent fundraising and transactions. Some of the disclosures required by regulators include the price of shares sold or purchased within 18 months of the IPO or, if there have been no transactions in the past 18 months, the last five primary or secondary transactions.

About Go Digit

Go Digit offers a variety of insurance products to meet the needs of its customers, including liability insurance, health insurance, travel insurance, property insurance, and marine insurance. As one of the first non-life insurance companies in India to operate entirely in the cloud, it has created APIs (Application Programming Interface) with a number of distribution partners.

Go Digit General Insurance is one of the most reputable insurance companies in the country and offers a variety of insurance products in the general non-life insurance category. For the sake of simplicity, the company’s original name, Oben, which means Go Digit in German, has been changed to Go Digit General Insurance. Offer policies online or via digital platforms as a digital insurance company.

Fairfax, a Toronto, Canada-based financial holding company, is investing in insurance company Go Digit. They started their journey in 2016 in Bengaluru, India.

As one of the first non-life insurance companies in India to operate entirely in the cloud, it has built APIs (Application Programming Interface) with a number of distribution partners.

Former Indian cricket team captain Virat Kohli and his wife Anushka Sharma are reportedly investors in Go Digit General Insurance.

The Bengaluru-based company is poised to grow with gross written premiums (GWP) of Rs 5,268 crore, Rs 3,243 crore and Rs 2,252 crore in fiscal years 2022, 2021 and 2020 respectively. From FY2020 to FY2022, the CAGR was 53%.

Edited by Prakriti Arora