In the realm of financial markets, initial public offerings (IPOs) often draw significant attention, marking a company’s transition from private to public ownership. Among the recent IPO buzz, Go Digit, a prominent insurance technology firm, has stepped into the spotlight with its much-anticipated IPO. Let’s delve into the intricacies of this offering, its details, and the potential impact of celebrity endorsement.
IPO Details:
Virat Kohli-backed Go Digit’s IPO, scheduled to hit the market on 15 May 24 to 17 May 24 and company seeks to raise Rs. 2,614 crores. The IPO comprises fresh issue of equity shares worth Rs. 4.14 crore shares worth Rs 1,125 crore and an offer for sale (OFS) of 5.48 crore shares worth Rs 1,489.65 crore by existing shareholders. Here are some key details of the Go Digit IPO:
· Issue Dates: 15-17 May 24
· Listing Date: 23 May 24
· Issue Price Range: Rs. 258 – 272 per equity shares of Rs. 10 each
· Lot Size: 55 shares
· Minimum Investment Amount: Rs 14,190 at lower price in price band
· Retail portion: 10% of the total issue
· Joint Lead Managers: ICICI Securities Ltd., Morgan Stanley India Co. Pvt. Ltd., Axis Capital Ltd.,
Go Digit’s Draft Red Herring Prospectus (DRHP) Analysis:
The Draft Red Herring Prospectus (DRHP) of Go Digit provides insightful information about the company’s operations, financial performance, and future prospects. The prospectus highlights the company’s competitive edge in leveraging data analytics and artificial intelligence to streamline processes and enhance customer experience.
Furthermore, the DRHP underscores Go Digit’s commitment to expanding its market presence and product offerings while maintaining a strong focus on profitability and risk management. Let’s have a look at the past financial performance of the company:
Period Income Profit/ Loss
FY 21 -118.55 Cr -122.76 Cr
FY 22 -293.64 Cr -295.85 Cr
FY 23 39.19 Cr 35.55 Cr
Future Prospects:
The management reports that its Gross Written Premium (GWP) grew steadily, rising from Rs. 3243.39 cr in FY-21 to Rs. 7242.99 cr in FY-23. In comparison to GWP for period 9M-FY23 of Rs. 5288.39 cr., it attained GWP of Rs. 6679.68 cr. for 9M-FY24. This shows the company’s potential for the future, and the management is optimistic about keeping the current patterns.
Risks and Opportunities:
With the increasing awareness among the masses regarding the importance of the insurance with rising income levels, the insurance sector offers a bright future prospect.
However, there are many well established players, and the competition is tough. The company has also not yet declared any dividend policy. Though the company has started generating profit, but issue seems costly priced as per the present performance of the company.
Can Virat Kohli impact provide the gains?
One notable aspect of Go Digit’s IPO is he involvement of renowned cricketer Virat Kohli as its brand ambassador. Celebrity endorsements can significantly influence consumer perception and brand visibility. Kohli’s association with Go Digit is expected to enhance its brand image and appeal, particularly among the younger demographic and sports enthusiasts.
However, it’s essential to note that while celebrity endorsements can boost initial interest and brand recognition, but the long-term success of a company depends on its fundamental strength, market strategy, and execution capabilities.
Multibagger takeaway:
The Go Digit IPO presents an exciting opportunity for investors to participate in the growth story of a technology-driven insurance player. However, due diligence and a balanced assessment of risks and rewards are crucial for making informed investment decisions in IPOs.
The insurance sector is complicated and is very difficult to understand for retail investors. Nobody knows what the future holds for this company and long-term prospects will depend on the company performance in the coming years. Keeping aside the buzz investors must analyse the risks attached to it. You may apply the IPO if you have extra funds for listing gains.
Disclaimer: We are not a SEBI registered analyst, please do your own research and consult your financial advisor before taking any investment decision. Indianmultibaggers will not be responsible for any loss in future. The prices and data may vary according to the market forces at the time of reading this article.