digit insurance

Indian market regulator puts insurer Digit’s $440 million IPO on ‘abuse’ • Technology Flow

digit insurance

The Indian capital market regulator has moved Digit’s IPO application on “hold”, citing a disappointing development for the online insurance plan to go public.

The Securities and Exchange Board of India (SEBI), the Indian market regulator, has updated the status of Fairfax-based Digit, noting that it has stopped the process of issuing observations for the startup’s filing.

The Indian startup, valued at $3.5 billion and whose backers include Sequoia Capital India, TVS Capital, A91 Partners and cricketer Virat Kohli and actress Anushka Sharma, filed a draft red herring prospectus to go public last month.

The five-year-old startup is looking to raise about $440 million in an initial public offering, Technology Flow reported.

SEBI did not give an explanation as to why it had put Digit’s IPO application on hold, but said its guidelines said, “A reason for taking this action is when there is probable cause for investigation, examination or prosecution against the entities. .”

The other two grounds are: when the regulator cannot conclude an investigation or inquiry “due to reasons beyond its control or due to the conduct of parties other than the entities” and when the board cannot conclude an inquiry into the conduct of entities.

Digit sells auto, health and travel insurance and is part of a group of companies trying to expand the number of people buying insurance coverage in India. Founded by Kamesh Goyal, a former KPMG executive with more than three decades of experience in the insurance industry, Digit simplifies the insurance buying process by enabling users to self-check, submit submissions and process service requests from their smartphones. It said in a filing last month.

The startup, which distributes its insurance through 32,600 partners, including about 31,000 point-of-sale agents and brokers, reported total revenue of $572 million and losses of $37.29 million in the fiscal year ended March.

Sebi’s move comes at a time when several local startups, including budget hotel chain Oyo and financial services platform Mobikwik, have delayed their IPO plans as they closely monitor the state of the global market, which has reversed most of the gains since 13 years. bull run SoftBank-backed Oyo said on Monday it has filed fresh documents to go public.

Digit did not immediately respond to a request for comment Monday.

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