Go Digit General Insurance IPO: Review, Valuation, Date & GMP

Go Digit General Insurance Limited IPO  - Complete Overview

Established in 2016, Go Digit General Insurance Limited is a leading digital full-stack insurance company offering a comprehensive range of insurance products including motor, health, travel, property, marine, liability, and others. 

The company has launched 74 active products across all business lines.

As of December 31, 2023, Go Digit maintains a broad distribution footprint across 24 of the 36 states and union territories in India. 

The company has established connections with about 61,972 Key Distribution Partners, including approximately 58,532 POSPs, individual agents, corporate agents, brokers, and others. Additionally, Go Digit offers its products directly to customers through its website and web aggregators.

The company has 1,883 API integrations with partners as of December 31, 2023, resulting in 34.54 million policies issued by partners with API integrations. Moreover, Go Digit has 473 active AI-driven microsystems in place to automate processes for the benefit of partners and customers.

Currently, the company operates from its 75 offices across India.

 

Go Digit General Insurance Limited IPO Overview

Go Digit General Insurance Limited IPO date is slated to be open for subscription from May 15, 2024, to May 17, 2024. This BSE, NSE IPO follows a Book Built Issue IPO.

Go Digit General Insurance Limited IPO price is fixed in the range of at Rs.258 to Rs.272 per share. 

The total issue size of this IPO amounts to Rs.2,614.65 Cr. The company has allocated shares 10% to retail investors, 75% to institutional and 15% to non-institutional investors.

Company Financial

Compared to the financial year ending March 31, 2023, and March 31, 2022, Go Digit General Insurance Limited has seen growth in total assets, net worth, and total revenue. The profit after tax has also increased.

Amount in Crore

Period	31 Dec 2023	31 Mar 2023	31 Mar 2022
Total Assets	3,619.95	3,346.75	2,919.01
Total Revenue	130.83	39.19	-293.64
PAT	129.02	35.54	-295.85
Net worth	2,459.34	2,325.47	1,866.87
Reserve & Surplus	2,391.97	2,383.61	1,975.07
Total Borrowings	200.00

 

The Objective of the Issue

The  company will use the net proceeds to fulfill the following objectives: 

(i)  To undertake the existing business activities of the company.

(ii)  To undertake the proposed activities to be financed from the  Net  Proceeds.  Further, the Company expects to receive the benefits of listing of the  Equity Shares on the Stock Exchanges, which, it believes, will result in the enhancement of its visibility and brand image among the existing and potential customers of the company.

Peers of Go Digit General Insurance Limited IPO

Name of the Company	Face Value (Rs)	EPS (Rs)	P/E Ratio
Go Digit General Insurance Limited	10	0.40	-
New India Assurance Company Limited	5	6.36	38.47
Star Health and AlliedInsurance Company Limited	10	10.41	53.79
ICICI Lombard GeneralInsurance Company Ltd	10	35.16	48.14

 

Evaluation

The IPO is priced within the range of Rs.258 to Rs.272 per share.

Evaluation of P/E Ratio

• Considering the FY23 EPS of Rs 0.41 from the last year, the resulting P/E ratio is 663.41x.

• Taking into account the weighted EPS of Rs (1.23) for the last three years, the P/E ratio amounts to (221.13)x.

Comparative Analysis with Listed Peers

• The industry's average P/E is 46.13x.

As a result, the IPO price range, with a P/E ratio ranging from 663.41x to (221.13)x, seems aggresively priced to the industry average of 46.13x.

IPO's Strengths 

• Simplified and Customized Customer Experience.

• Empowerment of Distribution Partners as Key Focus.

• Implementation of Predictive Underwriting Models.

• Utilization of an Advanced Technology Platform.

• Agile Organization Led by a Proficient Management Team.

 

IPO's Weaknesses

• The company has a history of reporting losses and may struggle to maintain profitability in the future.

• Compliance with mandatory solvency margin levels as per the Insurance Act is essential.

• The company has received Cautionary actions, warnings, and show-cause notices from IRDAI for alleged regulatory non-compliance.

• Extensive supervision and regulatory inspections by IRDAI, including onsite and offsite checks, are conducted regularly.

• Reliance on motor vehicle insurance products for a significant portion of revenue and profitability.

• Credit risks associated with investments and day-to-day operations, including reinsurance contracts, may lead to losses.

• The company has significant exposure to market risks, such as interest rate fluctuations and adverse movements in the Indian equity markets.

• No proceeds will be received from the Offer for Sale.

• Denial or delayed payment of claims could have a material adverse impact on the business.

• Dependence on regulatory approvals and licenses for business operations.

IPO GMP Today

The Latest GMP of Go Digit General Insurance Limited is Rs.4.

 

Go Digit General Insurance Limited IPO Timetable (Tentative)

Go Digit General Insurance Limited IPO is scheduled from May 15 to May 17, 2024, with allotment on May 21, refund initiation on May 22, and listing on May 23, 2024.

Events	Date
IPO Opening Date	May 15, 2024
IPO Closing Date	May 17, 2024
IPO Allotment Date	May 21, 2024
Refund initiation	May 22, 2024
IPO Listing Date	May 23, 2024

 

Go Digit General Insurance Limited IPO Details 

Go Digit General Insurance Limited IPO, with a face value of Rs.10 per share, opens on May 15 and closes on May 17, 2024, offering 96,126,686 shares at Rs.258 to Rs.272 per share, with a lot size of 55 shares, aiming to raise Rs.2,614.65 Cr, and will be listed on BSE, NSE.

IPO Opening & Closing Date	May 15, 2024 to May 17, 2024
Face Value	Rs. 10 per share
Issue Price	Rs 258 to Rs 272 per share
Lot Size	55 Shares
Price of 1 lot	Rs 14,960
Issue Size	96,126,686 Shares (aggregating up to Rs.2,614.65 Cr)
Offer for Sale	54,766,392 shares of Rs.10 (aggregating up to Rs.1,489.65 Cr)
Fresh Issue	41,360,294 Shares (aggregating up to Rs.1,125.00 Cr)
Listing at	BSE, NSE
Issue Type	Book Built Issue IPO
Registrar	Nuvama Wealth Management Limited

 

Go Digit General Insurance Limited IPO Lot Details 

For Go Digit General Insurance Limited IPO, the retail investor can invest minimum in 1 lot (55 shares) at Rs.14,960 and maximum in 13 lots (715 shares) at Rs.194,480 while for HNI investors, the minimum investment is 14 lots (770 shares) at Rs.209,440.

Minimum Lot Investment (Retail)	1 lot
Maximum Lot Investment (Retail)	13 lot
Minimum Lot Investment (HNI)	14 lot
Maximum Lot Investment (HNI)	67 lot

 

Go Digit General Insurance Limited IPO Reservation

Institutional share Portion	75%
Non-institutional share Portion	15%
Retail share Portion	10%

Promoters and Management of Go Digit General Insurance Limited

• Kamesh Goyal

• GoDigit Infoworks Services Private Limited

• Oben Ventures LLP 

• FAL Corporation

Pre-issue Promoter Shareholding	83.31%
Post-issue Promoter Shareholding

 

Go Digit General Insurance Limited IPO Lead Managers

• ICICI Securities Limited

• Morgan Stanley India Company Pvt Ltd

• Axis Capital Limited

• Hdfc Bank Limited

• Iifl Securities Ltd 

Dividend Policy

The Company has not declared any dividend on the  Equity Shares in the last three financial years.

 

Conclusion

The company operates in the insurance sector, which has undergone significant changes in recent years. While the company experienced losses in the past, it showed growth in FY23. Investors with a keen eye and deep understanding of the insurance sector may consider investing their funds for the long term in the upcoming IPO after thorough evaluation of all factors.