Digit Insurance files DRHP for Rs 1,250Cr IPO

Insurtech unicorn Digit Insurance has filed the draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for its Rs 1,250 crore initial public offering (IPO).

The IPO will contain an offer for sale (OFS) of 10.94 crore shares from existing shareholders.

“The proceeds from the issue will be used for augmentation of our capital base and expansion of business and improving solvency margin and consequently solvency ratio,” the company said in the draft papers.

Digit Insurance has not clarified the IPO dates in the draft prospectus. However, it is likely that the IPO will open after October 2022 as the regulator Insurance Regulatory and Development Authority (IRDAI) mandates insurtech companies to be at least five years old before going public.

As per this rule, Digit Insurance would be eligible for going public post-October 2022, as it was founded in October 2017. 

The company may sell around Rs 250 crore of shares in a pre-IPO placement; share sales in the IPO will be lower if the pre-IPO happens, it said in DRHP.

“If the pre-IPO placement is undertaken, the fresh issue size will be reduced to the extent of such pre-IPO placement,” it added.

Bengaluru-based Digit Insurance, which began its journey in October 2017 to sell primarily motor and travel and property insurance a, turned unicorn last year. Today, it offers insurance policies in multiple verticals and claims to have served over 20 million customers across the car, bike, health, and travel insurance segments.

The Fairfax-backed insurance company is founded by insurance veteran Kamesh Goyal. Among Digit’s investors are TVS Capital Funds, A91 Partners, Indian Cricket Team Captain (Men’s) Virat Kohli, and the employees of Digit.

(This is a developing story)

Edited by Affirunisa Kankudti