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

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

    HDFC Bank to acquire 9.94% stake in Go Digit Life Insurance
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    By CNBC-TV18  IST (Published)

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    HDFC Bank will invest between Rs 49.9-69.9 crore in two tranches. Shares of HDFC Bank ended at Rs 1,463.85, down by Rs 7.45, or 0.51 percent on the BSE.

    The country's largest private sector lender HDFC Bank on August 25 said it will invest in Go Digit Life Insurance Ltd, the general insurer backed by Canada-based Fairfax Group.
    HDFC Bank said it has proposed an investment of between Rs 49.9-69.9 crore, in two tranches, by subscribing to equity shares of the company, for an equity stake of up to 9.944 percent of the paid-up equity share capital of the company.
    The bank said it has entered into an indicative and non-binding term sheet with Go Digit Life Insurance.
    The investment is subject to the execution of definitive agreements whose terms and conditions are to be mutually agreed upon, and fulfilment of other terms and conditions, the bank said.
    The company proposes to engage in life insurance business in India, subject to the grant of a certificate of registration by the Insurance Regulatory and Development Authority of India (IRDAI), it added.
    Recently, Go Digit General Insurance filed draft papers with the Securities Exchange Board of India (SEBI) to raise funds through an initial public offering (IPO).
    Go Digit's IPO comprises fresh issuance of equity shares worth Rs 1,250 crore and an offer for sale (OFS) of 10.94 crore equity shares by a promoter and existing shareholders.
    As per the OFS, Go Digit will sell 10,94,34,783 equity shares. The company may consider a pre-IPO placement of equity shares aggregating up to Rs 250 crore.
    According to the papers, the proceeds from the fresh issuance will be utilised for the augmentation of the company’s capital base and maintenance of solvency levels and general corporate purposes.
    Go Digit offers motor insurance, health insurance, travel insurance, property insurance, marine insurance, liability insurance, and other insurance products, to meet the needs of the customers.
    It is one of the first non-life insurers in India to be fully operated on the cloud and has developed application programming interface (API) integrations with several channel partners.
    The Bengaluru-based company has a track record of delivering growth with gross written premium (GWP) at Rs 5,268 crore, Rs 3,243 crore and Rs 2,252 crore in financial years 2022, 2021, and 2020, respectively, with a compound annual growth rate (CAGR) of 53 percent from fiscal 2020 to fiscal 2022.
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