HDFC Bank Looks To Invest In Go Digit's Life Insurance Business

HDFC Bank has entered into a non-binding agreement to invest in Fairfax-backed insurance firm Go Digit Life Insurance Ltd.

The bank is looking to invest between Rs 49.9 crore and Rs 69.9 crore for an equity stake up to 9.944% in the firm, according to an exchange filing. While Go Digit has been operating in the non-life insurance segment so far, it is looking to enter life insurance, subject to regulatory approvals.

Earlier this month, Go Digit General Insurance Ltd. filed its draft red herring prospectus to raise funds via an initial public offering.

Founded in 2017, Go Digit General Insurance offers insurance in categories like health, motor, fire and others. In FY22, Go Digit booked a net loss of Rs 295 crore against revenue worth Rs 5,267 crore.

The firm has a customer base of 2.57 crore and has sold a total of 77 lakh insurance policies so far, according to its DRHP. Go Digit General Insurance has raised a total of $585.6 million (about Rs 4,679 crore) in funding and has been backed by investors like Sequoia Capital India, TVS Capital and Wellington Management.

Digit claims to hold a 2.3% market share in India’s insurance market overall and a 4.5% share in motor insurance.

While the DRHP does not indicate how much money it is looking to raise via the IPO, the listing will involve a fresh issue of shares worth Rs 1,250 crore and an offer for sale of 10.95 crore shares from existing shareholders.