Go Digit General Insurance Limited aim to make insurance simple. Through innovation and transparency, they believe in delivering a seamless customer experience journey in a significant financial product an individual would purchase in their lifetime. They are one of the leading digital full stack insurance companies, leveraging the technology to power what they believe to be an innovative approach to product design, distribution and customer experience for non-life insurance products. Full-Stack Insurers are insurance firms that are fully licensed and controlled by a regulatory authority and perform sourcing, underwriting and servicing all in-house. Digital full stack insurers are insurance manufacturing companies that focus on integrating technology in their operations. They offer motor insurance, health insurance, travel insurance, property insurance, marine insurance, liability insurance and other insurance products, which the customers can customize to meet his or her needs. As a digital full stack insurance company, they deploy a combination of insurance and technology solutions to assist in enrolment, insurance claims processing, underwriting, policy administration, data insights and fraud detection. According to the Red Seer Report which has been commissioned and paid for by the Company exclusively in connection with the Offer, they were the fastest growing insurer among private non-life insurers by GWP from Financial Year 2022 to Financial Year 2023, growing by approximately 37.5% over the period while the private non-life insurers overall grew by approximately 20.1% during the same period. As at December 31, 2023, there were 43.26 million people who were the customers or people who have availed the insurance benefits under various policies company issued since the inception of the insurance operations in 2017. Of this 43.26 million, 27.74 million customers acquired in motor insurance product, 14.97 million customers acquired in health insurance products (including personal accident & travel) and 0.55 million customers acquired in other insurance products. They have an established track record of delivering growth. The GWP was Rs 66.80 billion and Rs 52.88 billion for the nine months ended December 31, 2023 and the nine months ended December 31, 2022, representing a growth of 26.3% and was Rs 72.43 billion, Rs 52.68 billion and Rs 32.43 260 billion in Financial Year 2023, Financial Year 2022 and Financial Year 2021, representing a CAGR of 49.4% from Financial Year 2021 to Financial Year 2023. According to the RedSeer Report, which has been commissioned and paid for by the Company exclusively in connection with the Offer, company's GWP per employee for each of the nine months ended December 31, 2023 and Financial Year 2023 is higher as compared to the average GWP per employee for non-life insurance companies in India for each of the nine months ended December 31, 2023 and Financial Year 2023. As they have scaled, the expense & commission ratio has decreased, highlighting operating leverage in the business model. The annual yield on investments in the nine months ended December 31, 2023 (on an annualized basis) and Financial Year 2023 has averaged 7.4% and 6.3%, respectively. They have maintained an adequate capital position with a solvency ratio of 1.60 times and 1.78 times as of the nine months ended December 31, 2023 and Financial Year 2023, respectively, compared to the IRDAI level minimum solvency ratio guidance of 1.50 times. The technology platform supports the product design by enabling the incorporation of a modular product architecture and provides the backbone for the application program interfaces ('API'), applications, portals and website that allow customers and partners to engage with them conveniently. They are one of the first non-life insurers in India to be fully operated on cloud and have developed application programming interface (API) integrations with several channel partners. They had 1,883 API integrations with partners as of December 31, 2023, with 34.54 million policies issued by partners with API integrations since inception to December 31, 2023. They also utilize artificial intelligence and machine learning to increase automated processing of applications and claims. As per financial performance,Go Digit General Insurance Limitedhas posted total income / net profits of Rs (118.55) Cr / Rs (122.77) Cr (FY21), Rs (293.64) Cr / Rs (295.85) Cr(FY22), Rs 39.19 Cr / 35.55 Cr (FY23) and Rs 130.83 Cr / Rs 129.02 Cr (Q3 FY24). So as per previous financials data, company has shown good growth. Company has an average EPS of Rs (1.23) and average RoNW of (6.32%) for last three fiscals. Issue is priced at a P/BV of 9.80 as per NAV of 27.75 as on 31.12.23. If we attribute latest earnings of FY22, FY23, TTM and annualised FY24 on fully diluted equity post issue, then asking price is at a P/E of around (84.33), 701.83, 161.43 and 145.03respectively, which looks aggressively priced. As per RHP,comparison between listed peers is shown in above table. On BRLM's front, six lead managers are associated with this IPO, and have handled around 114 IPOs in last three fiscals. ICICI Securities Limited: This is 40th Main Board IPO from this BRLM. From last 10 Main Board IPOs, four opened below issue price and remaining opened above or at par issue price on the day of listing. As of now, from last 10 Main Board IPOs, three are trading below issue price and remaining are trading above issue price. ( As on 10.05.2024) Morgan Stanley India Company Private Limited: This is 2nd Main Board IPO from this BRLM. From last 1 Main Board IPOs, that opened above issue price on the day of listing. As of now, from last 1 Main Board IPOs, that is trading below issue price. ( As on 10.05.2024) Axis Capital Limited: This is 31st Main Board IPO from this BRLM. From last 10 Main Board IPOs, four opened below issue price and remaining opened above or at par issue price on the day of listing. As of now, from last 10 Main Board IPOs, two are trading below issue price and remaining are trading above issue price. ( As on 10.05.2024) HDFC Bank Limited: This is 4th Main Board IPO from this BRLM. From last 3 Main Board IPOs, one opened below issue price and remaining opened above or at par issue price on the day of listing. As of now, from last 3 Main Board IPOs, one is trading below issue price and remaining opened above issue price. ( As on 10.05.2024) IIFL Securities Limited: This is 30th Main Board IPO from this BRLM. From last 10 Main Board IPOs, three opened below issue price and remaining opened above or at par issue price on the day of listing. As of now, from last 10 Main Board IPOs, two are trading below issue price and remaining are trading above issue price. ( As on 10.05.2024) Nuvama Wealth Management Limited: This is 13th Main Board IPO from this BRLM. From last 10 Main Board IPOs, three opened below issue price and remaining opened above or at par issue price on the day of listing. As of now, from last 10 Main Board IPOs, six are trading below issue price and remaining are trading above issue price. ( As on 10.05.2024) As per financials, Go Digit General Insurance Limited has shown good growth, RoNW is 1.53% and P/E is respectively (84.33), 701.83, 161.43 and 145.03 as per FY22, FY23, TTM and annualised FY24 earnings. So, issue looks aggressively priced compared to peers. Company is a digital full-stack General Insurance, which is very competitive and fragmented business segment. The growth of the sector will be good. Performance of BRLMS are average. So, we give NEUTRAL rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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