SUMMARY
SEBI in a letter to Digit and its IPO advisers said that the startup’s proposed issue can open for subscription within a period of 12 months
After the market regulator put its IPO in ‘abeyance’ in 2022, Digit addressed the concerns and refiled a DRHP in March last year
Digit is now looking to launch its IPO, which would comprise a fresh issue worth INR 1,250 Cr and an OFS component of 10.94 Cr equity shares, in May
Insurtech unicorn Digit Insurance has reportedly received the Securities and Exchange Board of India’s (SEBI’s) nod for its initial public offering (IPO), nearly a year after it refiled its draft red herring prospectus (DRHP) with the markets regulator.
As per a Reuters report, SEBI in a letter sent to Digit and its IPO advisers said, “The proposed issue can open for subscription within a period of 12 months.”
However, the letter reportedly doesn’t specify the earlier compliance issues or SEBI’s position in those matters. But the go-ahead indicates that the market regulator is satisfied with the IPO application, the news agency reported.
Inc42’s email to the insurtech major did not elicit a response till the time of publishing the article.
It is pertinent to note that Fairfax and Sequoia-backed Digit first filed DRHP for its IPO in August 2022, which included a fresh issue worth INR 1,250 Cr and an offer for sale (OFS) component of 10.94 Cr equity shares. Soon after, SEBI put its IPO in ‘abeyance’.
The market regulator had raised certain concerns about its employee stock appreciation plans, which Digit addressed later and refiled a DRHP in March last year.
In the latest filing, the company said that its erstwhile Go Digit – Employee Stock Appreciation Rights Plan, 2018 has been amended and changed to ESOP 2018, pursuant to the resolutions passed by the board and shareholders on March 21, 2023 and March 27, 2023, respectively.
However, there were no changes in the IPO size.
As per the Reuters report, Digit is eyeing a listing in May.
Founded in 2017 by Kamesh Goyal, Digit offers insurance policies across verticals like health, motor vehicle, travel, property, and more. The startup is backed by prominent names, including cricketer Virat Kohli and actor Anushka Sharma.
If the IPO goes through, Digit would become the second new-age insurtech startup to go public after Policybazaar’s parent PB Fintech.
The development comes at a time when Indian new-age IPOs are witnessing a strong momentum after the lull of the last two years. Including Digit, at least 10-12 startups are expected to go public in 2024.
It is also pertinent to note that forensic-activist investing firm Muddy Waters in a recent study alleged that Fairfax Financial Holdings “hatched a plan” to take extremely aggressive fair value gains on its ownership in Digit during 2021. However, Fairfax Holdings refuted the allegations.
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