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August 17, 2022

India-based insurance startup Digit Insurance files draft documents for IPO

Digit Insurance has filed draft documents for its initial public offering (IPO) as it intends to raise INR12.5bn ($160m) from a fresh share issuance and via an offer for sale of 109.4 million equity shares, reported Economic Times.

Two people aware of the matter told the financial publication that the size of the IPO of the digital insurance company is likely to be around INR50bn ($630m).

Digit Insurance offers health, motor, travel, fire and other small-ticket insurance.

Motor insurance contributes over 50% of the digital insurance company’s gross written premiums.

Digit Insurance was one of the first unicorns of 2021.

Last year saw 44 firms touching a valuation of $1bn and over.

In a pre-IPO placement, the startup may sell around INR2.5bn ($32m) of shares.

If the pre-IPO placement occurs, then the offered size would be cut down, according to the draft red herring prospectus (DRHP) submitted to the Securities and Exchange Board of India (SEBI).

In July 2021, the digital insurance company raised $200m from current and new investors including Sequoia Capital India, Faering Capital, and IIFL Alternate Asset Managers. Its valuation had reached $3.5bn.

For the IPO, Morgan Stanley India Co, ICICI Securities, Axis Capital, Edelweiss Financial Services, HDFC Bank, and IIFL Securities are serving as the book managers.

The proceeds raised from the fresh issuance of shares will help Canadian billionaire- Prem Watsa-backed Digit Insurance to boost its capital base and maintain solvency levels besides funding its business expansion plan, reported MoneyControl.

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