Go Digit General Insurance IPO Summary

About the Company:

Founded in 2016, Go Digit is a Bengaluru-based full-stack digital insurance company offering motor, health, travel, property, marine, liability and other insurance products. The company provides customized insurance policies, and has launched a total of 74 active products across all its business lines so far.

As a digital full stack insurance company, the Company deploys a combination of insurance and technology solutions to assist in enrolment, insurance claims processing, underwriting, policy administration, data insights and fraud detection. According to the RedSeer Report, the Company is the fastest growing insurer among private non-life insurers by GWP (Gross Written Premium) in Financial Year 2023.

Industrial Overview:

According to the Insurance Regulatory and Development Authority of India (IRDAI) and Redseer analysis, the non-life insurance sector contributed around US$ 33.30 billion in Gross Written Premiums (GWP) in Financial Year 2023, showing a CAGR of 11.2% from Financial Year 2018- 2023 and a CAGR of 13.6% from Financial Year 2021-2023. The overall market is estimated to grow at a CAGR of 15-16% from Financial Year 2023- 2028.

The overall share of India in the global non-life insurance market is also expected to increase from 0.8% in Financial Year 2023 to ~1.2% by Financial Year 2028, driven by a burgeoning middle-class, rising awareness about insurance protection, innovative products, growth in associated industries like automobiles, healthcare, real estate and retail, and a favorable regulatory landscape.

The non-life insurance industry has several distribution channels. Individual agents sold 38% of Gross premiums in non-life insurance in Financial Year 2014. This percentage was reduced to 20.5% in Financial Year 2023 due to an increase in the share of brokers from 21.9% in Financial Year 2014 to 38.9% in Financial Year 2023. The broking license regime provides further impetus to the insurance business to become more customer-centric with brokers having the ability to sell policies from multiple insurers, thus giving customers more options to buy insurance.

Financials of the Company:

1. Revenue has grown at a CAGR or 49.44% from FY 21 to FY 23.

2. EBITDA

3. Net Profit

Company has become profitable at PAT level in FY 23.

Key Risks:

1. There are outstanding legal proceedings which may have a material impact on the Company.

2. The Company relies on motor vehicle insurance products for a substantial amount of its revenues and profitability. Any adverse changes in consumer demand for motor vehicles in India which may affect motor demand, the revenues derived from motor vehicle insurance products could be lower than expectations. This could have a material adverse effect on the business, financial condition, results of operations and prospects.

3. The company has in the past incurred operating losses and may in the future continue to incur them.

IPO Objectives:

The Company proposes to utilize the Net Proceeds towards maintenance of the solvency ratio.

Peers:

Valuation: 

The Company has a P/E of 680x. The Industry has a average P/E of 46.13x

IPO Details: