MUMBAI: Digital-only non-life insurance player Go Digit General Insurance which is backed by celebrity couple Virat Kohli and Anushka Sharma on Friday fixed the price bank for its Rs 2,615 crore IPO at Rs 258-272. The issue opens on May 15 and closes on May 17.
The Bengaluru-based Go Digit which is promoted by the Canada based NRI investor Prem Watsa said the IPO comprises a fresh issue of shares worth Rs 1,125 crore and an offer for sale (OFS) of 54,766,392 shares, according to the draft prospectus. At the upper end of the price band of Rs 272, the OFS would fetch about Rs 1,490 crore to the selling investors.
Kohli and Sharma entered the company in 2020 at Rs 75 a share and going by the price band they are going to make a killing with the IPO.
According to the issue prospectus, the RCB star batter acquired 2,66,667 equity shares amounting to Rs 2 crore, while Sharma bought 66,667 equity shares worth Rs 50 lakhs. Together, they invested Rs 2.5 crore. It’s not known how much they are divesting now.
At the upper end of the price band (Rs 272), Kohli's 2,66,667 shares are valued at Rs 7.25 crore, while Sharma's 66,667 shares are worth Rs 1.81 crore, totalling Rs 9.07 crore.
Go Digit’s promoters include Prem Watsa's Fairfax Group, Kamesh Goyal, GoDigit Infoworks Services and Oben Ventures.
The company has reduced its offer-for-sale (OFS) component to 5.47 crore equity shares from the previously proposed 10.94 crore shares.
About 75% of the IPO has been kept reserved for qualified institutional buyers, 15% for non-institutional investors and the remaining 10% for retail investors.
Proceeds from the sale of fresh shares will be used to improve the capital base and maintain solvency levels the management said here.
“The solvency ratio currently stands at 160 and the fundraise will take the solvency ratio to over 200,” said Kamesh Goyal, founder and chairman, Go Digit. The regulatory mandate is 150 percent.
The company's net profit in the nine months of FY24 rose to Rs 129 crore from Rs 10 crore a year ago. As of end December 2023, gross written premium rose 26.3 percent on-year to Rs 6,680 crore.
The key measure of profitability for a general insurer, the combined ratio of Go Digit, was 108.7 compared to 109.1 in the same period the previous year.
Goyal said as the solvency improves, they will have more funds to invest beyond debt instruments.