HDFC Bank announced on Thursday (August 25) that it would invest in Go Digit General Insurance’s life insurance business in the IPO (initial public offering) route. Go Digit-Life Insurance has signed an ‘indicative and non-binding’ term sheet with the country’s largest private sector bank.
“HDFC Bank Limited has entered into an indicative and non-binding term sheet with Go Digit-Life Insurance Ltd (Company), which summarizes the main terms of a proposed investment of between INR 49.9 crores to INR 69.9 Cr, in two tranches, by subscribing to equity shares of the Company for an equity stake of up to 9.94%,” HDFC Bank said in a regulatory filing.
This comes a week after Go Digit General Insurance submitted its draft red herring prospectus (DRHP) to the Securities and Exchanges Board of India (SEBI) for publication.
Virat Kohli-backed startup is planning to issue fresh equity worth INR 1,250 Cr, as well as an offer for sale (OFS) of 109.45 Mn shares from existing shareholders.
Go Digit General Insurance, founded in 2017 by Kamesh Goyal, is a digital full-stack insurance company that offers services such as health, travel, and auto insurance.
Until the end of the financial year 2021-22 (FY22), it claims to have served more than 25 million customers. It has issued more than 7 million policies to date and had assets worth INR 9.4 Cr at the end of FY22.
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It is backed by marquee names such as Canada-based Fairfax, A91 Partners, TVS Capital, Faering Capital, Wellington Hadley Harbor Partners, and Sequoia India, among others. The unicorn had last raised INR 121 Cr in a funding round which sent its valuation soaring to $4 Bn.
The insurtech major reported a loss after tax of INR 295.86 Cr in FY22, up 141% from the INR 122.76 Cr in FY21.
According to Inc42 data, insurtech is expected to emerge as the second biggest sub-sector in the fintech space and is likely to account for 26% or $339 Bn in total addressable market value by 2025.
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