Virat Kohli Backed Insurance Company: Digit Plans Rs 4000 Crore IPO: Check Full Details Of Digit IPO

India’s Digit Insurance is considering raising about $500 million in an initial public offering at a valuation of $4.5 billion to $5 billion, according to the sources. 

Digit Insurance IPO

Digit Insurance is backed by Canadian billionaire Prem Watsa’s Fairfax Group,

The insurance company’s founder Kamesh Goyal is a veteran of the insurance industry who worked with Germany’s Allianz and headed its Indian joint venture. 

Further, the Indian cricket star, Virat Kohli is an investor and also the brand ambassador for the company.

IPOs Affected By Market Condition

The firm was founded in 2017 and is trying to capitalize on India’s under-penetrated general insurance market.

It also works with users’ need for a better customer experience like easier claim settlements.

The insurance firm has appointed Morgan Stanley and Indian investment bank ICICI Securities as bookrunners for the deal. 

In the same regards, it plans to file its draft documents to the markets regulator by September as it is planning to list by January, said the sources.

So far, there is no information released by the company as Digit declined to comment on “speculation”. 

Earlier this month, Digit was valued at close to $4 billion when it raised a tranche of funding. 

So far, the company has raised more than $400 million from Sequoia Capital, A91 Partners and Faering Capital, besides Fairfax.

In recent times, IPOs are not faring well considering the current economy.

Owing to the same, India’s biggest public offering – of state-owned Life Insurance Corp – dropped 7.8% on debut this month.

It has raised $2.7 billion which is far less than its original plan of $12 billion. 

Similarly, the Fintech firm, Paytm also plunged on its debut last November following a $2 billion IPO.

After a boom in 2021, Indian start-ups are facing difficulty raising money privately this year.

Normally, India’s insurance regulator requires companies in the sector to be at least five years old before going public. 

Digit seems to be fulfilling that requirement by September. 

The insurance firm plans to raise money by offering new shares along with Fairfax, its largest shareholder with about 30%, trimming its stake, said the sources.

Digit IPO Details

According to the data from the Insurance Regulatory and Development Authority of India, Non-life insurance penetration in India stood at only 0.94% in 2020/21, from 0.56% about 20 years ago.

Digit website shows that it has served more than 20 million customers across car, bike, health and travel insurance.

If we consider the last fiscal year, its revenue surged 62% to about $675 million, outpacing the industry’s 11% increase. 

Besides this, the insurance firm has recorded a net loss of $7.8 million on revenue of $309 million in 2020/21.

Although, its latest profit or losses could not immediately be ascertained.

Interestingly, Digit is among India’s few startup unicorns.

Here, unicorns is a term used for the companies valued at more than $1 billion – which is profitable or close to profitability.

According to the Bankers, the demand for Digit’s IPO will depend on how it prices its shares, in addition to macroeconomic factors.