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Research Primary Market IPO NOTE – Go Digit General Insurance Limited

IPO NOTE – Go Digit General Insurance Limited

Written by - Fisdom Research

May 15, 2024 8 minutes

Company Background

 Established in 2016, Go Digit General Insurance Limited operates as a digital full-stack insurance provider, presenting a suite of insurance solutions including motor, health, travel, property, marine, liability insurance, and more, all of which customers can tailor to their preferences. 

By December 31, 2023, the company had expanded its distribution network to cover 24 out of India’s 36 states and union territories, cultivating partnerships with approximately 61,972 Key Distribution Partners. These partners comprise around 58,532 Point of Sale Persons (POSPs), individual agents, corporate agents, brokers, and other affiliates. 

Company Key Highlights 

Go digit General Insurance stands as a forefront digital full-stack non-life insurance provider, harnessing technology to drive innovation across product design, distribution, and customer engagement for non-life insurance offerings. The company provides a range of insurance products including motor, health, travel, property, marine, and liability insurance, among others, allowing customers to tailor their coverage to suit their specific requirements. 

  • High-quality customer experience: 

The company is committed to fostering trust and transparency in customer interactions by streamlining insurance processes and providing clear, customizable products that elevate the customer journey. With a steadfast dedication to enhancing customer experiences, the company has achieved remarkable satisfaction rates, boasting net promoter scores of 75.4% for non-claims and 96.8% for motor claims as of December 31, 2022. Additionally, users of the “Digit Insurance” mobile app, available on both Android and iOS platforms, have consistently expressed high satisfaction levels. 

  • Advanced technology platform: 

Their technology stands out as a pivotal factor in distinguishing themselves within the insurance industry, facilitating swift underwriting processes. By combining AI-driven analytics with human evaluation, they optimize the entire value chain, delivering advantages to customers, partners, and employees alike, all while enhancing efficiency. In-house microsystems revolving around their technological backbone streamline routine tasks such as policy design, underwriting, pricing, issuance, servicing, and claims management. Operating entirely in the cloud, the platform ensures agility, connectivity, and scalability for seamless operations. 

  • Predictive Underwriting Models: 

Drawing on their proficiency in the motor insurance sector, they’ve harnessed their extensive data repository to develop intricate underwriting models. These models facilitate precise risk evaluation and loss forecasting at a detailed level for their motor insurance offerings. Such a method bolsters cost control, empowering them to refine product customization and broaden their clientele. The resultant data fuels a pricing feedback loop, aiding in ongoing product enhancements and cost efficiencies. 

Key Business Strengths 

  • The Company offers a simple and tailored customer experience. 
  • It also has a strong focus on empowering their distribution partners. 
  • It has developed predictive underwriting models. 
  • It has built a technology – enabled platform. 
  • Experienced management team. 

Key Risks to Business 

  • Go Digit General Insurance faces profitability hurdles due to past losses, uncertain future prospects, and challenges in assessing business performance. 
  • The company experiences volatile operating results marked by fluctuating profit/loss figures and low operating profit ratios, signalling operational instability and potential financial strain. 
  • A Majority revenue comes motor insurance. 
  • It operates in a highly competitive industry. 

Fisdom Research Assessment: 

Despite the company’s robust technological infrastructure and market position indicating potential future profitability, its shift from motor insurance to health insurance poses a significant risk if profitable underwriting isn’t achieved in the latter segment. Heavy investment in health insurance without corresponding returns could lead to adverse outcomes, necessitating vigilance from investors on the business front. Even on the valuation front, the IPO appears overvalued. 

Considering these factors and the company’s competitive stance within the digital full-stack General Insurance sector, we maintain a “NEUTRAL” rating for this IPO. 

Offer Details 

Offer period 
Bid/Offer Opens On: Wednesday, May 15, 2024 
Bid/Offer Closes On: Friday, May 17, 2024 
Issue Size Price Band Bid Lot 
~ Rs.2,480 – Rs.2,615 Cr Rs. 258 – Rs.272 55 
Particulars Lots Shares Amount 
Minimum 55 RS. 14,960 
Maximum 13 715 Rs. 1,94,480 
Minimum 14 770 Rs. 2,09,440 
Maximum 66 3,630 Rs. 9,87,360 
Minimum 67 3,685 Rs. 10,02,320 

Issue Structure 

QIB Shares Offered Not more than 75% of the offer size 
Retails Shares Offered Not more than 10% of the offer size 
NII (HNI) Shares Offered Not more than 15% of the Net Issue 

Indicative IPO Timeline 

Bid/Offer Opening Date Wednesday, May 15, 2024 
Bid/Offer Closing Date Friday, May 17, 2024 
Finalization of the basis of allotment with  The designated stock exchange Tuesday, May 21, 2024 
Initiation of refunds Wednesday, May 22, 2024 
Credit of equity shares to depository  Accounts Wednesday, May 22, 2024 
Listing Date Thursday, May 23, 2024 

Other Details 

Book Running Lead Managers ICICI Securities Limited, Axis Capital Ltd, Morgan Stanley India Company Private Ltd HDFC Bank Ltd, IIFL Securities Ltd, Nuvama Wealth Management Ltd 
Objects of the Issue 
1) To undertake its existing business activities  2) To undertake the activities proposed to be funded from the Net Proceeds. Further, the Company expects to receive the benefits of listing the Equity Shares on the Stock Exchanges, which, the company believes, will enhance the visibility and its brand image among its existing and potential customers. 
Listing At BSE, NSE 

Financial Elements 

Particulars Dec-23 Mar-23 Mar-22 Mar-21 
Total Asset (Cr.) ₹ 3,620 ₹ 3,347 ₹ 2,919 ₹ 1,875 
Revenue (Cr.) ₹ 131 ₹ 39 -₹ 294 -₹ 119 
PAT (Cr.) ₹ 129 ₹ 36 -₹ 296 -₹ 123 
Basic EPS ₹ 1.48 ₹ 0.41 -₹ 3.55 -₹ 1.50 
Diluted EPS ₹ 1.46 ₹ 0.40 -₹ 3.55 -₹ 1.50 
EPS for Dec-23 is not annualised 

Comparison with Listed Industry Peers (Fiscal 2023) 


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