Insurtech Unicorn Digit Files To IPO, Offers Shares worth INR 1,250 crore In a New Issue


The IPO will include a new issue of INR 1,250 crore and an offer to purchase in the amount of 109.45 Mn shares of existing shareholders

Digit Insurance’s tax-free loss was INR 295.86 Cr. This is which is up 141% over the INR 122.76 Cr that it had reported during the previous fiscal year.

Digit also announced that INR 6,095.24 Cr in premiums received in FY22, which was up 68% over FY21.

Virat Kohli-backed unicorn in the field of Insurtech Digit Insurance has filed the draft prospectus red herring (DRHP) for its initial public offering (IPO) in the Securities and Exchanges Board of India (SEBI).

The IPO will comprise a fresh issue worth INR 1,250 cr as well as an offer to purchase (OFS) that will comprise 109.45 Mn shares of existing shareholders. The size of the offer will be disclosed when the IPO files are filed with regulatory authorities, it appears.

ICICI Securities, Morgan Stanley, Axis Capital, Edelweiss, HDFC Bank and IIFL Securities are the bookrunners for the IPO.

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The speculation about the major insurtech company’s IPO was prevalent over the past couple of months and included the media reporting in April suggesting the company could go public with 500 million IPO with an estimated value of $4.5-5 Billion. According to reports, Digit Insurance would file the DRHP in September, and then be listed in January 2023.

Insurance regulator Insurance Regulatory and Development Authority (IRDAI) requires insurtech companies to have at minimum five years old prior to going public. If we look at this, Digit Insurance would not be eligible to go public prior to October 2022 since it was established in October 2017.

While the startup hasn’t provided any clarification on details regarding IPO dates in its prospectus draft, it is probable that the IPO will begin after the month of October 2022.

The public offering is what makes Digit Insurance the second insurtech startup to go public following Policybazaar did it in the same year. In 2021, the company raised INR 120 Cr in a round of funding that increased its value to $4 billion. The major insurtech company has therefore a plan to increase its value on the market.

Established in 2017 by Kamesh Goyal in the year 2017, Digit Insurance offers insurance policies across various sectors. Digit has provided more than 20 million customers in the bike, car and health as well as travel insurance sectors, as per its website.

In the financial report for FY22, Digit Insurance booked an operating loss of INR 375.15 Cr across its insurance operations which is up 102% over that INR 185.49 Cr reported in FY21. The startup’s losses after tax was INR 295.86 Cr. That’s an increase of 141% from INR 122.76 Cr recorded in during the fiscal year prior.

Digit Insurance also reported INR 6,095.24 Cr in premiums received in FY22. This also includes receipts for advance payments. The startup insurtech had registered an INR 3,616.79 Cr in premiums received in FY21. This means that Digit saw an increase of 68% in premiums it received.

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