Go Digit IPO Review

Go Digit General Insurance (Go Digit) is a leading digital full stack insurance company, for non- life insurance products. Go Digit General Insurance offers motor insurance, health insurance, travel insurance, property insurance, marine insurance, liability insurance and other insurance products. Go Digit IPO intends to raise Rs 2,614.65 crores. The issue is a combination of fresh issue of 4.14 crore shares aggregating to Rs 1,125.00 crores and offer for sale of 5.48 crore shares aggregating to Rs 1,489.65 crores.

IPO opensMay 15, 2024
IPO ClosesMay 17, 2024
IPO Size (Rs.)₹2,614.65 Cr (96,126,686 shares)
Breakupfresh issue ₹1,125.00 Cr+ OFS ₹2,614.65 Cr
Face Value:₹ 10 per share
IPO Price in Rs :₹258 to ₹272 per share
Minimum Lot55 Shares
Listing AtNSE, BSE
QIB~75%
NII Quota~15%
Retail Quota~10%
 Lead ManagerAxis Capital, ICICI Securities, Morgan Stanley, HDFC Bank, IIFL Securities, Nuvama Wealth
RegistrarLink Intime India

About Go Digit General Insurance:

  • Company was incorporated as ‘Oben General Insurance Ltd’ in 2016 and subsequently, the name was changed to ‘Go Digit General Insurance Ltd’, in 2017.
  • The company’s promoters are Kamesh Goyal, Go Digit Infoworks Services Pvt. Ltd, Oben Ventures LLP and FAL which is promted by Fairfax Financial Holdings Limited.
  • Go Digit General Insurance offers motor insurance, health insurance, travel insurance, property insurance, marine insurance, liability insurance and other insurance products, which customers can customize as per their needs.
  • As of December 31, 2023, it had a broad distribution footprint across 24 of the 36 states and union territories in India.
  • It had relationships with approximately 61,972 Key Distribution Partners, including approximately 58,532 POSPs, as well as individual agents, corporate agents, brokers and others.
  • It also offers products directly to customers through website, as well as through web aggregators. 
  • The company has launched 74 active products across all business lines. The company has achieved a market share of 6.0% and 5.4% respectively as of 9 months ended December 31, 2023, and FY2023, in the motor insurance segment.
  • On Technology front, the company has been one of the first non-life insurers in India to be fully operated on cloud. The company had 1,883 API integrations with partners as of December 31, 2023, with 34.54 million policies issued by partners with API integrations since inception to December 31, 2023.

Financials: Go Digit IPO

Particulars/ Rs (in crore)2023(09)2022(09)2023(12)2022(12)2021(12)
Total Income5,891.204,284.105,885.703,841.002,252.00
Restated Profit/(Loss)1291035.5-295.9-122.8
Equity share capital874.7873.9874859824.7
Net Worth2,459.302,299.602,325.501,866.901,134.60
EPS Diluted (₹)1.50.10.4-3.6-1.5
 NAV27.825.926.221.413.5
Total Borrowings200
Post issue Share Capital917.2    
FV10.0    
IPO price272.0    
EPS Fy230.4    
PE Fy23702.8    
EPS Fy24 (annualized)1.9    
PE Fy24  (annualized)145.0    
Market cap in Lacs24,947.8    
Market cap / Sales4.24    
Price / BV5.5    

Go Digit IPO: Anchors

  • Go Digit IPO secured Rs 1,176.59 crore from anchor investors.
  • Among the anchor investors, the American multinational Fidelity Investments-backed fund (Fidelity Funds- India Focused Fund) received the largest allocation at 7.95%. Other major anchor investors include Goldman Sachs Funds (5.31%), Abu Dhabi Investment Authority (5.31%), Custody Bank of Japan (4.25%), and Bay Pond Partners (4.11%).
  • Total 11 domestic mutual funds participated in the anchor allocation, collectively securing 33.51% of the total anchor book size.

Go Digit IPO: Salient Points

  • Go Digit General Insurance is one of the leading digital full stack insurance companies.
  • Full-Stack Insurers are insurance companies that are fully licensed and controlled by a regulatory authority and perform sourcing, underwriting, and servicing all in-house.
  • The Digital full stack insurers like Go Digit focus on integrating technology in their operations.
  • Digital full stack insurers have been able to capture around 3.3% of the overall non-life insurance market during FY2023, which has increased to 4.3% estimated as of the 9 months ended December 31, 2023 as measured by GWP (Gross written premium) written by public and Pvt. general insurance companies (excluding standalone health insurers and specialized PSUs). Gross written premium is the total amount of money an insurer collects from its customers in exchange for insurance policies. 
GWP (in ₹ Cr)9 months ended 31st December As at March 31st,
 20232022202320222021
Go Digit6,679.75,288.47,243.05,267.63,243.4
Acko1,364.01,082.81,509.4988.2422.4
Navi49.357.072.4107.8104.9
  • In 9 months ended December 31,2023 & FY2023, Go Digit catered for 82.5% & 82.1%, respectively, of the GWPs (Gross written premium) written by the digital full stack insurance players (including Go Digit, Acko and Navi) making the company, the largest digital full stack insurance player in India.
  • Key Performance Indicators:
  Particulars  Units
9 months ended 31st December As at March 31st ,
20232022202320222021
No. of of Customersmillions43.335.338.825.814.3
No. of of Policies Issuedmillions8.57.710.67.85.6
GWP₹ Cr6,679.75,288.47,243.05,267.63,243.4
Retention Ratio%84.379.181.679.481.2
Total investment income₹ Cr776.5516.5721.8436.7308.3
AUM₹ Cr14,909.011,826.212,668.49,393.95,590.1
  • It serves with a variety of products and segments
  Contribution to GWP9 months ended December 31,As at March 31st,
20232022202320222021
(%)₹ Cr(%)₹ Cr(%)₹ Cr(%)₹ Cr(%)₹ Cr
Motor61.14,080.859.13,124.562.54,527.462.23,275.875.02,432.8
Liability1.7114.812.0633.69.2662.712.7671.62.374.9
Property and Engineering11.4763.711.8625.010.4750.411.0578.113.6441.3
Health (excl. travel & personal accident)14.9991.010.5555.110.5762.38.0419.55.6182.7
Personal Accident3.6242.52.1108.72.4174.04.6243.30.928.1
Travel0.318.00.529.30.539.60.313.20.13.2
Other7.0468.84.0212.34.5326.61.266.22.580.3
Total100.06,679.7100.05,288.4100.07,243.0100.05,267.6100.03,243.4
  • The fresh capital will be used for the expansion of the company’s capital base and maintenance of solvency levels and general corporate purposes.
  • Go Digit General Insurance is a fast growing and a leading digital full stack non-life insurance company.
  • Cricketer Virat Kohli and his actress wife Anushka Sharma are also shareholders of the company having invested Rs. 2.4 crore in the company few years back at a lower price.
  • Go Digit General Insurance Ltd, a firm backed by Canada-based Fairfax Group ( owned by Indo Canadian Prem Watsa)
  • The company has been able to gain market share, which improved to 3.2% in FY2024 from 2.9% in FY2023.
  • Go Digit’s GWP (Gross written Premium) per employee for each of the 9 months ended December 31, 2023, and FY 2023 is higher vs. the average GWP per employee for non-life insurance companies in India during the same period, indicating better operational efficiency
  • Go Digit turned profitable in FY2023 and improved its profitability further in 9MFY2024.
  • Go Digit IPO is coming at a PE of 146x ( FY24 annualized earnings) and P/ BV multiple of 5.5 times
  • Among listed peers in the non-life insurance space, New India Assurance is trading at P/ BV multiple of 1.3 times and PE of 40X.  ICICI Lombard General Insurance at is trading at P/ BV multiple of 7 times and PE of 45.2 times.
  • My assessment of Go Digit IPO
    • Apply : I am not inclined to apply at this stage. May do so on Day 3 if there is good response to IPO .
    • Perceived Risk: Moderate to High.
    • Listing Gains : Not Sure or Low
    • Short to Medium Term View: Neutral to slightly positive
    • How it stacks with Peers: Just OK. Valuations are not cheap.
    • Industry prospects : Fair.
    • Remarks: Other than Fancied mainline IPOs, other have been able to hold to their listing gains or have slipped below issue price, Hence suitable for risk taking investor or for those with a larger Horizon.
    • These views are my personal opinion based on my limited understanding of the company & its business. Use them only as an input for further research on the company.
  • GMP as reported on social media has been Rs. 18 (6%)
  • Please take a decision based on your risk appetite and your own assessment.
  • Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.

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