Axis Bank to acquire 9.94% stake in Go Digit Life Insurance

India's third largest private sector lender Axis Bank on Tuesday informed that it has entered into an indicative and non-binding term sheet with Go Digit Life Insurance for a proposed investment of Rs 49.90 to Rs 69.90 crore for 9.94 per cent stake. Axis Bank's announcement comes just a month after HDFC Bank said it will pick up 9.94 per cent stake in Go Digit Life Insurance.

Axis Bank, too, has set its eyes on tapping huge potential in the insurance sector. In a regulator filing, Axis Bank today said: "(It) has entered into an indicative and non-binding term sheet with Go Digit for a proposed investment...of an amount between Rs 49.90 crore to Rs 69.90 crore, in two tranches, by subscribing to equity shares of the Company, for an equity stake of up to 9.94% of the paid-up equity share capital of the Company, subject to execution of definitive agreements whose terms and conditions are to be mutually agreed upon, and fulfillment of other terms and conditions."

The bank further said that Go Digit proposes to carry out life insurance business in the country, subject to the grant of a certificate of registration by insurance regulator IRDA.

On August 17, Go Digit filed preliminary IPO papers with the capital markets regulator SEBI (Securities and Exchange Board of India). However, earlier this month, it was reported that the regulator had kept the IPO in "abeyance". As per the draft papers, Go Digit IPO comprises fresh issuance of equity shares worth Rs 1,250 crore and an offer for the sale of 10.94 crore equity shares by a promoter and existing shareholders.

Founded in 2017, Go Digit is backed by Fairfax Capital and Sequoia Capital India. Virat Kohli and Anushka Sharma have also invested in the company, which currently offers general insurance products - car, bike, health insurance - and now entering the life insurance space.