Digit Insurance targets $5 billion in IPO valuation
MUMBAI: Digit Insurance, backed by Canadian billionaire Prem Watsa’s Fairfax Group, is considering raising about $500 million in an initial public offering at a valuation of $4.5 billion to $5 billion, three people aware of the matter told Reuters.
Founded in 2017, Digit is trying to capitalise on India’s under-penetrated general insurance market along with users’ need for a better customer experience like easier claim settlements, though IPOs in the country have not done well in the past few months.
Digit has appointed Morgan Stanley and Indian investment bank ICICI Securities as bookrunners for the deal. It plans to file its draft documents to the markets regulator by September and list by January, said the people, who sought anonymity as they were not authorised to talk to the media.
A spokesperson for Digit declined to comment on “speculation”. ICICI too declined to comment while Morgan did not respond to emails seeking comment.
Digit was valued at close to $4 billion earlier this month when it raised a tranche of funding. It has so far raised more than $400 million from Sequoia Capital, A91 Partners and Faering Capital, besides Fairfax.
India’s biggest public offering - of state-owned Life Insurance Corp - dropped 7.8% on debut this month after it raised $2.7 billion, far less than its original plan of $12 billion. Fintech firm Paytm also plunged on its debut last November following a $2 billion IPO.
Indian start-ups also have found it difficult to raise money privately this year after a boom in 2021.
India’s insurance regulator requires companies in the sector to be at least five years old before going public, which Digit will fulfil by September.
Digit plans to raise money by offering new shares along with Fairfax, its largest shareholder with about 30%, trimming its stake, the people said. Fairfax could not immediately be contacted.
Digit founder Kamesh Goyal is a veteran of the insurance industry who worked with Germany’s Allianz and headed its Indian joint venture. Indian cricket star Virat Kohli is an investor and also its brand ambassador.