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go digit insurance ipo should you invest

Go Digit Insurance IPO: The IPO (Initial Public Offering) of Go Digit Insurance, the company backed by Virat Kohli and his wife Anushka Sharma, has opened. The company has fixed the price range for the Rs 2,651 crore IPO at Rs 258 to Rs 272 per share.

Go Digit Insurance IPO: The IPO (Initial Public Offering) of Go Digit Insurance, the company backed by cricketer Virat Kohli and his wife Anushka Sharma, has opened. Investors have got the opportunity to invest money in it from Wednesday. The company has fixed the price range for the Rs 2,651 crore IPO at Rs 258 to Rs 272 per share. Go Digit Insurance also has the backing of Canada-based Fairfax Group. Anil Singhvi has advised to avoid investing money in this IPO, why so? Learn

What is Anil Singhvi’s opinion on Go Digit Insurance IPO?

Market guru Anil Singhvi has advised to avoid investing money in the IPO of Go Digit Insurance. He has directly asked to avoid it. He said that one can consider investing in it after listing, after listing one has to invest in it only after seeing the management’s outlook on future business growth. For this, he has also given positive and negative reasons, so that you can take the investment decision yourself.

What is positive?

  • The promoters of the company are experienced.
  • It is the first non-life Indian insurance company to run operations completely on cloud.
  • FIIs are good investors as anchor investors.
  • Virat Kohli and Anushka Sharma have invested in this company.

What is negative?

  • The company has a record of making losses. Earned very small profit in FY-23
  • Motor vehicle is heavily dependent on insurance business.
  • There are very expensive valuations on current financials.
  • PE multiple of 668 in FY23. PE at multiple of 145 in 9MFY24
  • ICICI Pru and New India available at much lower valuations than this
  • RoNW i.e. Return on Net Worth is at 1.53%, which is much lower than other companies in the industry. 
  • ICICI Pru is much higher at 16.64%.
  • Solvency ratio is also very low compared to other companies.
  • Commission ratio is much higher than competitors
  • It is not known whether the company will grow as fast as its competitors or not.

How much subscription did Go Digit Insurance IPO get on the first day?

The initial public offering (SEPO) of Go Digit General Insurance received 36 percent subscription on the first day of bidding on Wednesday. According to NSE data, bids were received for 1,88,86,890 shares against the offer of 5,28,69,677 shares in the initial share sale. The retail individual investors (RII) segment received 1.44 times subscription and the non-institutional investors segment received 34 per cent subscription. Go Digit General Insurance has raised a little over Rs 1,176 crore from anchor investors. The company’s IPO worth Rs 2,615 crore will close on Friday. 

Go Digit’s proposed IPO involves issuance of fresh equity shares worth Rs 1,125 crore and an offer for sale (OFS) of 5.47 crore equity shares worth Rs 1,490 crore by promoter Go Digit Infoworks Services and existing shareholders. At the upper end of the price band, the total size of the IPO becomes Rs 2,615 crore. At present, Go Digit Infoworks Services holds 83.3 percent stake in the company. The proceeds from the sale of new shares will be used for enhancing the capital base of the company and maintenance of solvency level and normal company functioning.

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