Insurance company Go Digit’s IPO papers were returned by SEBI: The company to refile again in 2023.
Insurance company Go Digit’s IPO papers were returned by SEBI: The company to refile again.
The Canadian Fairfax Group-backed startup Go Digit General Insurance Ltd.’s preliminary IPO papers were rejected by the markets watchdog Sebi. The company is trying to resubmit the documents with other information.
According to an update with Sebi, the markets regulator returned the draft papers on January 30.
Go Digit General Insurance submitted a draft red herring prospectus (DRHP) to the Securities and Exchange Board of India (SEBI) in August of last year in preparation for its Initial Public Offering (IPO). The IPO consists of a fresh issuance of Equity Shares for Rs. 1,250 crore and an offer-for-sale (OFS) of 10,94,45,561 Equity Shares by the promoter and existing shareholders.
The company wanted to use it for General Corporate purposes, improve its Capital Base, and maintain solvency levels. The issue’s book-running lead managers were ICICI Securities, Morgan Stanley India Company, Axis Capital, Edelweiss Financial Services, HDFC Bank, and IIFL Securities.
The insurance company issued a statement explaining that the DRHP (Draft Red Herring Prospectus) had been returned in accordance with Sebi’s ICDR (Issuance of Capital and Disclosure Requirements) rules, which exempt rights granted under employee stock option plans that were in effect at the time the draft prospectus was filed but do not exempt employee stock appreciation rights.
The business stated that it is now analyzing changes to its employee stock appreciation rights program and would resubmit its DRHP to Sebi without delay.
According to the draft papers, it has been suggested that the money raised from the new issuance be used for General Business purposes, increasing the company’s Capital Base, and maintaining solvency levels.
How SEBI approves companies to go public?
Normally, a weekly update on the IPO’s development is provided by the Securities and Exchange Board of India (SEBI), where companies submit their Draft Red Herring Prospectus (DRHP). The SEBI look into the documents and, if necessary, seeks clarifications before finalizing their approval and listing.
As many companies are getting IPO but not using it properly, and no profits are outcoming for the investors, SEBI tightened up the IPO norms and made changes to the ways how IPOs would be approved.
The capital markets regulator Securities & Exchange Board of India (Sebi), has announced crucial measures to encourage more Initial Public Offers (IPOs) at a time when around 100 companies are in the pipeline to access the stock markets through IPOs.
While Sebi has tightened the disclosure requirements for businesses seeking to go public, it has given a new path for businesses to file the Offer Document with a limited amount of Information Initially and stated Sensitive Information after the real IPO Process Approaches.
This helped to ease the concerns of market participants and industry players that the Draft Offer Document contains a lot of sensitive information about the company and that, while the company is unable to launch the IPO, the disclosures could sometimes be harmful to the firm’s growth prospects. Interestingly, there have been many times when businesses have filed the draft document and then had to pause the Offer owing to market conditions.
Sebi has further strengthened the disclosure requirements, specifically for Key Performance Indicators (KPIs) based on the last fundraising and transactions. Some of the disclosures asked by the regulator include the price of shares Sold or Purchased Within 18 months of the IPO or if there have been no transactions in the last 18 months, the last Five Primary or Secondary Transactions.
About Go Digit
Go Digit provides a variety of insurance products to suit the needs of its customers, including liability insurance, health insurance, travel insurance, property insurance, and marine insurance. One of the first non-life insurance companies in India to function entirely in the cloud, it has created Application Programming Interface (API) interfaces with a number of Channel Partners.
One of the most reputable insurance companies in the country, Go Digit General Insurance gives a variety of insurance products in the General Non-life Category. In order to keep things simple, the company’s original name, Oben, which in German means “Go Digit,” was modified to “Go Digit General Insurance.” Offer policies online or through digital platforms being a digital insurance company.
Fairfax, a Toronto, Canada-based financial holding corporation, is an investor in the Go Digit insurance company. They started their journey in 2016 in Bengaluru, India.
One of the first non-life insurance companies in India to function entirely in the cloud, it has created Application Programming Interface (API) interfaces with a number of Channel Partners.
Virat Kohli, former Indian cricket team captain, and his wife Anushka Sharma are reportedly investors in Go Digit General Insurance.
The Bengaluru-based company has a record of generating growth, with Gross Written Premium (GWP) of Rs 5,268 crore, Rs 3,243 crore, and Rs 2,252 crore in the fiscal years 2022, 2021, and 2020, respectively. From fiscal 2020 to fiscal 2022, the CAGR was 53%.
Edited by Prakriti Arora