Fairfax-backed Digit Insurance gets SEBI nod for IPO after delays

Insurance technology firm Digit Insurance has received approval from the Securities and Exchange Board of India (SEBI) to proceed with its initial public offering (IPO), Reuters reported on Monday. The IPO faced delays due to various compliance issues, but the recent approval signals a green light for Digit Insurance to move forward with its plans. The IPO was initially slated for 2022.

Digit Insurance, with a last valuation of $3.5 billion, faced setbacks in its initial public offering plans after filing in August 2022. The market regulator had raised concerns about the legality of certain share issuances, causing delays in the process.

After addressing the issues, Digit resubmitted its IPO papers to SEBI in March, and the regulatory approval has now been granted. The general insurance company is backed by investors such as Fairfax Group and A91 Partners. "The proposed issue can open for subscription within a period of 12 months," said the letter sent on Friday to Digit and its IPO advisers as per Reuters.

Reuters said while the letter from SEBI does not detail the earlier compliance concerns or the regulator's stance, sources familiar with the matter indicate that the approval signifies satisfaction with the IPO application.

Digit Insurance is now set to market its IPO to potential investors over the next month, with plans for a listing by May. 

Digit Insurance aims to raise 12.5 billion rupees ($151 million) through its upcoming IPO, which includes an offer for the sale of 109.4 million shares, as indicated in its prospectus. The company's IPO plans align with the current robust phase in India's stock markets and public listings.

Bankers anticipate that 2024 could be one of the country's most significant years for IPOs, marking a record boom in this sector.