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May 26, 2022

India’s Digit Insurance looking to raise $500m in IPO at $5bn valuation

Indian fintech start-up Digit Insurance is planning to raise around $500m through an initial public offering (IPO), Reuters reported citing three undisclosed sources. 

The general insurance startup is eying a valuation of up to $5bn. 

It has chosen investment lenders Morgan Stanley and ICICI Securities as book-runners for the IPO. 

The insurer plans to file its papers with the markets regulator by September 2022 and go public by January next year, the sources revealed.

Earlier this month, Digit raised a tranche of funding at a valuation close to $4bn. The funding followed the company’s $200m fundraise in July 2021.

Established by industry veteran Kamesh Goyal, Digit’s offerings include home, travel, property, and moto insurance. 

The firm is said to have raised more than $400m since its inception in 2017.

It is backed by the likes of Sequoia Capital, Fairfax Financial, TVS Capital Funds, A91 Partners and IIFL Alternate Asset Managers, among others.

Digit will raise funds by offering new shares, the sources said, adding that Fairfax, which controls around 30% of the insurer, will also offload its shareholding. 

According to bankers, demand for Digit’s IPO will depend on the pricing of shares along with the macroeconomic factors. 

“Digit is growing fast, so by the time they start talking to IPO investors, the $4bn valuation will seem outdated. Given they do not burn cash, it is an attractive proposition for institutional investors,” one banker was quoted by the news agency as saying. 

Verdict deals analysis methodology

This analysis considers only announced and completed deals from the GlobalData financial deals database and excludes all terminated and rumoured deals. Country and industry are defined according to the headquarters and dominant industry of the target firm. The term ‘acquisition’ refers to both completed deals and those in the bidding stage.

GlobalData tracks real-time data concerning all merger and acquisition, private equity/venture capital and asset transaction activity around the world from thousands of company websites and other reliable sources.

More in-depth reports and analysis on all reported deals are available for subscribers to GlobalData’s deals database.

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