The deal will value the IPO-bound Go Digit General Insurance’s prospective life insurance business at $90 Mn
The plans underscore Axis Bank’s growing interest in the insurance sector and the partnership could help the banking major fulfill its insurance ambitions: Report
Last week, HDFC Bank announced plans to invest up to INR 69.9 Cr in Go Digit Life Insurance for an equity stake of up to 9.94%
Axis Bank is reportedly in talks with Go Digit Life Insurance to acquire a stake in the insurtech startup.
The banking major is looking to pick up a 10% stake for around $9 Mn in Go Digit General Insurance’s prospective life insurance business, valuing it at $90 Mn, news agency Reuters reported citing sources.
The move is part of Axis Bank’s plans to strengthen its presence in the insurance sector.
“Axis’ plans underscore growing interest in India’s lucrative insurance business from private lenders…the partnership with Digit could help Axis fulfill its insurance ambitions,” a source was quoted as saying.
The source also said that the acquisition will enable Axis to gather a better understanding of the online insurance industry and enable it to ‘improve outreach to insurance customers with its own banking offerings’.
It is pertinent to note that Axis Bank already offers certain insurance products in partnership with Max Financial.
The announcement comes nearly a week after another banking major HDFC Bank announced its plans to invest up to INR 69.9 Cr in Go Digit Life Insurance for an equity stake of up to 9.94%.
Axis Bank’s announcement comes close on the heels of Go Digit General Insurance filing its draft red herring prospectus (DRHP) with the Securities and Exchanges Board of India (SEBI) for its initial public offering (IPO).
A clutch of media reports have pegged the total size of the IPO at around INR 5,000 Cr. The startup plans to issue fresh equity worth INR 1,250 Cr and an offer for sale (OFS) of 109.45 Mn shares.
Go Digit General Insurance, founded in 2017 by Kamlesh Goyal, is a digital full-stack insurtech startup that offers health, travel and vehicle insurance.
Go Digit General Insurance has issued more than 7.7 Mn policies till date and had assets aggregating INR 9.393 Cr under management at the end of the financial year 2021-22 (FY22).
Despite this, the insurtech startup continues to be a loss-making venture. In FY22, the insurtech player reported a loss after tax of INR 295.86 Cr, up 141% from INR 122.76 Cr in FY21.
Go Digit General Insurance primarily competes with players such as ICICI Lombard, Acko, Allied Insurance, among others.
According to Inc42 estimates, the total addressable market value of India’s insurtech sector will soar to $339 Bn by 2025, buoyed largely by increasing insurance penetration and percolation of digital services.
