Fairfax, A91, TVS Capital-backed Go Digit’s IPO plan gets pushed back
Go Digit General Insurance Ltd, which filed documents for its initial public offering (IPO) last August to raise Rs 1,250 crore and an offer for sale by its promoter to encash over Rs 3,700 crore, has hit a hard roadblock.
The capital markets regulator Securities and Exchange Board of India (SEBI) that had previously kept the IPO application in ‘abeyance’, has ‘returned’ the documents.
This means the IPO process gets delayed even as it does not mean it cannot go ahead with the issue in the near future. After putting the IPO clearance in abeyance, SEBI had put it back on track within weeks. But the papers being returned now means the proposed issue’s timeline gets stretched.
Go Digit joins other names like hospitality firm Oyo and mobile phone maker Lava whose draft papers for IPO were returned by SEBI recently.
SEBI did not specify any reason for setting aside the approval process for Go Digit.
Canadian investment firm Fairfax, which has struck several private equity-style investments and had even created an India-focused investment unit, is looking to hit a jackpot from Go Digit as it partially monetises a bet on the Indian insurer.
Fairfax, which has a special affinity for insurance-related business globally, had co-created a digital-first general insurance business, Go Digit, in India a few years ago. It is now looking to harvest part of its investment.
Fairfax owns a 45% stake in the promoter entity with its partner Kamesh Goyal owning the rest. The two had created the insurance company seven years ago. Fairfax is likely to encash around Rs 1,600 crore, or about $200 million, from the IPO.
Fairfax isn’t the only one that is spinning big money from the insurance company. The company has attracted capital from several venture capital and private equity firms in the country since January 2020.
A91 Capital, a growth equity VC fund floated by former Sequoia executives as well as mid-market private equity firms Faering Capital and TVS Capital will be sitting on unrealised big gains, per the expected IPO price.
Others who joined the cap table over the last two years, such as Sequoia Capital and IIFL’s PIPE fund and individual investors like Kunal Shah, are likely to be sitting on unrealised modest gains at the anticipated IPO price.
Go Digit’s net loss more than doubled to Rs 300 crore for the year ended March 31, 2022. It would be the third largest non-life insurance company on the Indian bourses, behind ICICI Lombard General Insurance and Star Health & Allied Insurance.