IPOs | Latest IPOs News | Upcoming IPOs | Go Digit General Insurance | IPO advise | IPO call | IPO recommendation | IPO allotment Status| Financials | Shareholding

Industry : Finance/NBFC

Go Digit General Insurance View all IPOs

Price Band

Rs. 258 – Rs. 272

Go Digit General Insurance is going public with a fresh issue and offer for sale. The issue opens on 15th May 2024.

MOJO CALL

Why

Neutral

MOJO CALL

Avoid

Neutral

Excellent claim settlement ratio

The company has utilized technologies like AI/ML and big data analytics to develop and underwrite insurance contracts, resulting in increased accuracy. As of December 2023, the insurer had a claim settlement ratio of 96.2%, significantly higher than established peers such as ICICI Lombard (84.9%), United India Insurance (87%), Acko General Insurance (89.8%), and Star Health (89%). This high claim settlement ratio has led to loyal customers and repeat business.

Improving Market share

Incorporated in 2017, the company has rapidly expanded, achieving a 3% market share in the non-life insurance sector and a 6% share in the motor insurance segment. Over the past two years, it has grown its Gross Written Premium at a CAGR of 49%.

High dependence on Motor insurance

Despite efforts to reduce its reliance on motor insurance, the company still generated around 61% of its Gross Written Premium (GWP) from motor insurance in the nine months ending December 2023. This is not a significant decrease from the 62% and 63% contributions in FY2022 and FY2023, respectively.

Valuations

The company is seeking a valuation of 3.4 times its GWP, which is lower than the 3.8 times Price/GWP ratio of its established peer ICICI Lombard. At the current price, it is asking for a Price-to-Book (P/B) ratio of 10.1, which is higher than that of ICICI Lombard’s 6.7. However, considering the company's rapid GWP growth, this valuation seems reasonable. Therefore, we maintain a neutral stance on the issue.

Issue Details

Issue Opens	15th May 2024
Issue Closes	17th May 2024
Price Band	Rs. 258 – Rs. 272
Issue size (Upper Band)	Rs. 2614.65 Cr
Issue Type	FRESH ISSUE & OFFER FOR SALE
Market cap (based on upper band)	Rs. 24948 Cr
Sales- March 2023 (Rs./Crs)	1064.6 Cr
Net Profit - March 2023 (Rs./Crs)	148.49 Cr
Industry	Finance/NBFC
Promoters	Kamesh Goyal, Go Digit Infoworks, Oben Ventures and FAL Corp.
Lead Manager	ICICI Securities, Morgan Stanley, Axis Capital, IIFL Securities and Nuvama Wealth.

Objective of the Issue

Details

Objectives of the Issue – Fresh Issue – Rs 1,125 cr & Offer for Sale– Rs. 1,489.65 cr

The Objectives of the Offer are for:
1. Maintenance of solvency ratio – Rs 1,125 crore

List of Shareholders Selling Their Stake

Name	Type	816,000 (in Rs)	% of OFS
Go Digit Infoworks	Promoter	14,89,35,27,008	99.98%
Nikita Mihir Vakharia	Individual Investor	1,088,000	~0%
Nikunj Hirendra Shah	Individual Investor	1,027,616	~0%
Subramaniam Vasudevan	Individual Investor	816,000	~0%

Business Operations

About Company

Go Digit General Insurance is a digital full stack insurance player offering non-life insurance products ranging from motor insurance, health insurance, travel insurance, marine insurance, etc. among others. The share of motor insurance in the total GWP stood at 61% in 9MFY2024, whereas the share of health insurance stood 15% in 9MFY2024.

The insurer has a strong focus on enabling technology in the non-life insurance value chain to enable faster and seamless issuance and claim settlement processes.

Go Digit was one of the front runners in enabling technology-based insurance products and has garnered a market share of 82.5% among the full stack digital insurers, followed by Acko General Insurance and Navi General Insurance.

The insurer ranked 8th among the non-life insurer players in India with a market share of around 3% in the nine months ended December 2023. It also ranked 3rd in the motor insurance segment with a market share of 6% in the same period.

Segment Revenue Breakup

Gross Written Premium Breakdown by Segment:
Segment	9MFY2024	FY2023	FY2022	FY2021
Motor Insurance	61%	63%	62%	75%
Liability Insurance	2%	9%	13%	2%
Property Insurance	11%	10%	11%	14%
Health Insurance	15%	11%	8%	6%
Others	11%	7%	6%	3%

Financials

Financial Overview

The insurer grew its Gross Written Premium (GWP) to Rs 6,680 crore, at a CAGR of 49% from FY2021 to FY2023. For the nine months ending December 2023, GWP growth stood at 26% over 9MFY2023.

For 9MFY2024, the insurers AUM stood at Rs 14,909 crore, growing by 26% over 9MFY2023. Investment income for the period grew by 50% to Rs 776.5 crore.

The company has invested 62.6% of its assets in Government bonds and 28.5% of its assets in corporate bonds.

The insurer’s yield on investment stood at 7.4% for 9MFY2024 (annualized), an expansion of 120bps over 9MFY2023.

The insurer had a solvency margin of Rs 2,628 crore indicating a solvency ratio of 160%. The minimum required solvency by the regulator is 150%, and hence the company is raising money to improve its solvency.

Financial Performance (Rs/crore)

Rs./Crs	9MFY2024	FY 23	FY 22	FY 21
Sales	140.95	105.46	81.50	66.94
Net Profit	129.02	35.55	-295.85	-122.76