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IRDA imposes Rs 1 Cr fine on Go Digit Insurance

EntrackrEntrackr · 1y ago
IRDA imposes Rs 1 Cr fine on Go Digit Insurance
Medial

The Insurance Regulatory and Development Authority of India (IRDAI) has imposed a penalty of Rs 1 crore on IPO-bound Go Digit General Insurance for inordinate delay in the filing the particulars of the joint venture agreement related to the change in the conversion ratio of compulsorily convertible preference shares (CCPS) issued by its parent company to FAL Corporation. In November, the regulator had issued a show cause notice to the firm in the matter. About 63,00,000 CCPS were issued by Go Digit’s parent company—Go Digit Info Works Services Pvt. Ltd. (GDISPL)— to Fairfax Group-owned FAL Corporation. During the time of the joint venture agreement in 2017, it was agreed upon that the conversion ratio was “1 CCPS for 2.324 equity shares”, which was changed by the company to “2.324 CCPS for 1 equity share.” Instead of 63,00,000 CCPS, a total of 78,00,000 were issued by GDISPL, the regulator noted in the order date of May 2, 2024. The company’s response further admits that “the specific non-submission of JV agreement to the authority was purely inadvertent and unintentional.” Digit Insurance has been facing issues from the regulator ever since it filed its DRHP in August 2022. Initially, SEBI did not provide the approval and sought additional information while it also returned Digit’s prospectus over employee stock plans. In April 2023, the company refiled its draft IPO papers. In November, the firm received show cause notice and multiple advisories from IRDAI for non-disclosure of change in the conversion ratio of compulsorily convertible preference shares (CCPS). However, Digit managed to get SEBI’s approval to raise funds through IPO in March this year. Digit is among a bunch of companies which had also faced friction from the regulators in the past. Last month, FirstCry had to refile its draft IPO papers after SEBI’s concern. Earlier, fintech firm MobiKwik and travel tech company TBO also refiled their draft papers with reduced IPO sizes.

Related News

Go Digit invests Rs 30 Cr in Dr. Reddy’s Lab

EntrackrEntrackr · 4m ago
Go Digit invests Rs 30 Cr in Dr. Reddy’s Lab
Medial

Go Digit invests Rs 30 Cr in Dr. Reddy’s Lab Insurtech company Go Digit has invested Rs 30 crore in pharmaceutical major Dr. Reddy’s Laboratories, acquiring a 0.32% stake in the company. “The investment in shares is being made in the ordinary course of the investment function of the company,” Go Digit said in an exchange filing. Established in 1984 by Kallam Anji Reddy, Dr. Reddy's Laboratories is an Indian multinational pharmaceutical company that manufactures and markets affordable medicines. It provides a portfolio of products and services, including active pharmaceutical ingredients (APIs), custom pharmaceutical services (CPS), generics, biosimilars and differentiated formulations. Founded in 2017 by Kamesh Goyal, Go Digit is a full-stack digital insurance company that offers a wide range of non-life insurance policies across sectors such as motor vehicle, health, travel, and property, among others. Go Digit’s profit after tax (PAT) surged 176.46% year-on-year (YoY) to Rs 118.52 crore in Q3 FY25, driven by steady revenue expansion and a controlled rise in operating expenses. As of December 31, 2024, Go Digit’s assets under management stood at Rs 18,939 crore. Go Digit competes with other notable players like Acko, ICICI Lombard, Bajaj Allianz, Tata AIG, among others.

Bombay HC sets aside Rs 170 Cr GST demand against Go Digit, orders fresh adjudication

EntrackrEntrackr · 10d ago
Bombay HC sets aside Rs 170 Cr GST demand against Go Digit, orders fresh adjudication
Medial

Bombay HC sets aside Rs 170 Cr GST demand against Go Digit, orders fresh adjudication The Bombay High Court has provided major relief to Go Digit General Insurance by setting aside a Rs 170.29 crore GST demand raised by the Chennai South Commissionerate of GST & Central Excise. The order, dated July 4, includes Rs 154.8 crore in alleged tax dues and Rs 15.48 crore in penalties for the period from July 2017 to March 2022. According to Go Digit’s filing accessed from the National Stock Exchange (NSE), the High Court noted that the GST Council had already discussed this industry-wide issue and issued related circulars. Now, the court has asked the tax department to review the case again, keeping those guidelines in mind, and complete the process within three months. This update comes just a few months after Go Digit listed on the stock market. The tax demand was earlier mentioned in its Red Herring Prospectus under “Material Tax Proceedings.” The company said it is reviewing legal options and is waiting for the official court order to be delivered. Importantly, the company clarified that the case is part of a broader issue impacting the insurance industry at large and that no financial implications arise at this stage due to the High Court's intervention. The insurance company recorded a 2.2X increase in profits to Rs 116 crore during the last quarter of the previous fiscal year (Q4FY25). Meanwhile, for the full fiscal year (FY25), its profits surged 133% to Rs 425 crore. The company is currently traded at Rs 333.9 as of 11.25 AM with a total market capitalization of Rs 30,828 crore or $3.6 billion.

Digit Insurance IPO's retail portion fully subscribed; key highlights of the offering

Economic TimesEconomic Times · 1y ago
Digit Insurance IPO's retail portion fully subscribed; key highlights of the offering
Medial

Bengaluru-based digital insurance company, Go Digit General Insurance Ltd, has launched its Rs 2,615 crore initial public offering (IPO). The retail portion of the IPO was fully subscribed by 1.45 pm on Wednesday. The IPO comprises a fresh equity issue of Rs 1,125 crore and an offer for sale (OFS) of up to 54.7 million shares. Go Digit plans to use the net proceeds to support ongoing business operations and finance future growth activities, particularly focusing on digital and omnichannel expansion. The company reported a net profit of Rs 129 crore for April-December FY24 and achieved a valuation of $3 billion-$3.2 billion for the IPO. However, it has faced legal issues and penalties from the IRDAI.

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