Yesterday, Go Digit Insurance, a major player in India’s insurtech sector, successfully secured $141 million from anchor investors ahead of its initial public offering (IPO) on Wednesday, May 15th, 2024. The anchor investors included prominent names like Fidelity, Goldman Sachs, Abu Dhabi Investment Authority, Steadview Capital, and leading Indian mutual funds.
Back in April, we had reported about how Microsoft-backed, IIT graduate-founded Rubrik completed IPO after raising $752M funding.
Notably, the company set a price band of Rs 258 to Rs 272 per share for the IPO, seeking a valuation of $3-3.2 billion. This represents a 25% discount compared to its valuation during the last private fundraising in 2022. This cautious pricing strategy likely reflects current market conditions and ensures a more attractive offering for retail investors.
Company background and growth strategy
Founded in 2017 by Kamesh Goyal, Go Digit is the first new-generation insurance company in India to go public. A successful IPO outcome could significantly boost the insurtech sector’s growth trajectory in the country. Goyal emphasises profitability, rapid expansion, and the immense potential of the general insurance market as key factors that will attract retail investors.
Go Digit’s digital focus and target audience
Go Digit leverages technology to simplify the insurance experience for its customers. This includes features like self-inspection, online claim submission, and mobile app-based service requests.
With over 43 million customers and 8 million policies issued by December 2023, Go Digit has established a strong presence in the Indian insurance market. The company targets retail investors by positioning itself as a fast-growing and profitable player in a promising industry segment.
IPO details and market response
The IPO comprises an offer-for-sale of existing shares by promoters and other shareholders alongside a fresh issue to raise additional capital. Approximately 75% of the offering is reserved for institutional investors, 15% for non-institutional investors, and 10% for retail investors.
Notably, the retail investor portion of the IPO was fully booked within hours of opening, reflecting strong early demand. Overall, the IPO has received a positive response so far, with subscriptions reaching 23% on the first day.
What we think about the update
Go Digit’s IPO is a significant development for India’s insurtech sector. The company’s focus on technology-driven solutions, customer experience, and a competitive valuation strategy position it well to capitalise on the growing insurance market. The success of the IPO will be keenly watched as it sets a precedent for future insurtech companies seeking public listings in India.
