Go Digit IPO shares to make D-Street debut on Thursday; will it deliver a strong listing pop?

Shares of Go Digit General Insurance are set to make their Dalal Street debut on Thursday, May 23. The new-age general insurer is set to deliver mild listing pop to the investors, if one goes by the signal from the grey market. Go Digit is witnessing a gradual improvement in its grey market premium (GMP) ahead of its listing.

Last heard, shares of Go Digit General Insurance were commanding a grey market premium of Rs 30-32, suggesting listing gains of around 11-12 per cent to the investors above the issue price of Rs 272 apiece. However, the company's premium in the unofficial market stood at Rs 10-15 at the closure of the bidding process.

The Go Digit General Insurance IPO has received healthy oversubscription by about 9.6 times, we expect a substantial listing of the issue when it debuts on the bourses on Thursday. We expect shares to list at around Rs 300 per share compared to the issue price, implying an upside of about 10 per cent, said Shreyansh V Shah, Research Analyst at StoxBox.

"As we advance, the company intends to maintain a healthy product pipeline focused on continuing innovation, improve its ability to segment risk by increasing the influence of behavioural factors in its underwriting and pricing models and expand its distribution network to increase customer reach and generate new business," he said suggesting investors to hold for long term.

Pune-based Go Digit General Insurance's IPO ran between May 15 and May 17, which was sold in the price band of Rs 258-272 per share with a lot size of 55 shares. The company raised a total of Rs 2,614.65 crore through its primary offering, which included a fresh share sale of Rs 1,125 crore and offer-for-sale (OFS) of up to 5,47,66,392 equity shares.

The issue was overall subscribed 9.60 times. On an individual basis, quota for qualified institutional bidders (QIBs) was booked 12.56 times. The quota for non-institutional investors was subscribed 7.24 times, and the portion reserved for retail investors was subscribed 4.27 times during the three-day bidding process.

The Go Digit General Insurance IPO initially sparked interest, with a grey market premium (GMP) reaching higher levels, the current GMP sits at Rs 30, approximately 11 per cent above the issue price. This decline could be attributed to the current market volatility and a relatively moderate subscription of 9 times, said Shivani Nyati, Head of Wealth at Swastika Investmart.

"Although the IPO valuation may seem aggressive compared to recent earnings, Go Digit's strong technological edge and presence in a rapidly growing Indian insurance market offer long-term potential for profitability. Overall, Go Digit's IPO presents a possibility of a decent listing, but with toned-down enthusiasm compared to earlier expectations," he said.

Backed by Prem Watsa's Fairfax Group, Go Digit General Insurance is a general insurance provider, offering motor insurance, health insurance, travel insurance, property insurance, marine insurance, liability insurance and other insurance products. Customers can customize their insurance to meet their needs.

Brokerage firms are mostly positive on the issue suggesting investors subscribe to it. ICICI Securities, Morgan Stanley India Company, Axis Capital, Nuvama Wealth Management, HDFC Bank and IIFL Securities are the book running lead managers of the Go Digit IPO, while Link Intime India is the registrar for the issue