Digit

[nwoodman]

39 minutes ago, SafetyinNumbers said:

I read that as IRDAI approval has been received and the two people were referring to SEBI approval.

 

The Rupee has weakened since 2022 when they filed the initial IPO. At the time the suspected IPO valuation was $4.5-5b. On the same basis, the low end would be down to $4b. It’s grown a lot since then but perhaps there has been some multiple contraction. It looks like the plan is to sell 12.5% of the company with $150m being fresh issue and the rest from promoters. I don’t know if that includes Fairfax selling some.

 

If anyone has any colour, please share. 

 

 

I believe MINT broke this news.  It is unconfirmed IRDAI approval as far as I can tell.  Sounds promising, hopefully Fairfax confirms tonight or on the CC as I couldn’t find anything on the IRDAI website….yet

[ValueMaven]

Greenlight for IPO.  This is big and adds to FFH's book value

[jeyfox]

I will put it here rathen then in the Fairfax annuel letter 2023.

Digit max ownership will be 68% against 74% (in 2022 letter).

 

[nwoodman]

https://irdai.gov.in/life

 

Digit Life 426 Crore => $US51m in premiums.  License granted June 2023

 

31.03.2024 को जीवन बीमाकर्ताओं का प्रथम वर्ष का प्रीमियम _ First year premium of Life Insurers as at 31.03.2024.xlsx

Edited April 23 by nwoodman

[Hoodlum]

That is interesting.  So a 2% market share in just 9 months.

[Hoodlum]

IPO is expected on the 15th next week, with IPO range announcement coming in 2 days.  
 

https://www.businesstoday.in/amp/markets/ipo-corner/story/virat-kohli-backed-go-digit-may-launch-ipo-next-week-here-are-key-details-428682-2024-05-08

 

Go Digit General Insurance is looking to launch its initial public offering (IPO) next week, likely on Wednesday, May 15, 2024, said a report from ET Now. The company price band of the issue will be declared on Friday, May 10 and the anchor book may open on Tuesday, May 14.  

Edited 13 hours ago by Hoodlum

[nwoodman]

31 minutes ago, Hoodlum said:

IPO is expected on the 15th next week, with IPO range announcement coming in 2 days.  
 

https://www.businesstoday.in/amp/markets/ipo-corner/story/virat-kohli-backed-go-digit-may-launch-ipo-next-week-here-are-key-details-428682-2024-05-08

 

Go Digit General Insurance is looking to launch its initial public offering (IPO) next week, likely on Wednesday, May 15, 2024, said a report from ET Now. The company price band of the issue will be declared on Friday, May 10 and the anchor book may open on Tuesday, May 14.  

Cheers, big news if true.  Here is the source

 

 

[SafetyinNumbers]

I’m a bit rusty on where Digit is marked on Fairfax’s books.

 

i think most of the value is being marked on the convertible preferred despite most of the ownership being through the common equity. 
 

[Thrifty3000]

If Digit IPOs at $4 bil what will the impact be to FFH’s BV?

[MMM20]

Do we have a ticker!?

[Hoodlum]

Fairfax has GO digit listed as 49% ownership in their shareholders letter.  But it looks like Fairfax was able to covert their debt to shares in advance of the IPO.  IRDA did fine them yesterday ~$120k for non-disclosure of a change to how they were converted but it looks like it went through.  This was likely the last step before going ahead with the IPO.  
 

I still don’t see what Fairfax ownership will look like after the IPO but they will likely have majority ownership as this was a key component of the IPO for Fairfax. I would expect that Fairfax will issue a press release after the IPO announcing their new ownership share of Go Digit  along with the impact on Book Value. 

 

https://www.indiainfoline.com/news/business/irdai-penalizes-go-digit-insurance-with-1-crore-for-non-disclosure-of-ccps-change

Edited 4 hours ago by Hoodlum

[Thrifty3000]

Back of the envelope:

 

In the annual report it looks to me like FFH is valuing/carrying their Digit holdings at around $2.2 to $2.3 billion.

 

If FFH owns 58% of Digit after the IPO and if Digit’s market cap is around $4.5 billion then the IPO will increase FFH’s BV per share by around $15 pre-tax.

 

 

[gfp]

8 minutes ago, Thrifty3000 said:

Back of the envelope:

 

In the annual report it looks to me like FFH is valuing/carrying their Digit holdings at around $2.2 to $2.3 billion.

 

If FFH owns 58% of Digit after the IPO and if Digit’s market cap is around $4.5 billion then the IPO will increase FFH’s BV per share by around $15 pre-tax.

 

 

 

That's right, they are carrying the 49% (pre-IPO percentage) equity at $152.2 million USD and they are carrying the compulsory convertible pref. shares at approximately $2.092 Billion.  If completely converted (regulatory approval needed), this would result in Fairfax owning 68% of Digit (pre-IPO percentage).  It looks like the IPO will dilute them slightly and they may choose to sell a few shares in the IPO - I have no idea.

[dartmonkey]

Can someone explain to me how 49% of the equity is only worth $152m (carrying value)? Or only worth $476m ('fair value', according to the Q1 report.) It clearly can't be that $2.092b worth of preferreds will only convert to an addition 19% of the equity. Explain it to me like I'm an 8-year old.

[Haryana]

Rs.1500cr is total out of which Rs.1250cr is fresh and Rs.250cr is existing equity from promoters.
They are saying that count of existing equity offered for sale is ~11cr shares, thus ~Rs.23/share.

 

While Virat and Anuskha paid Rs.75 for each share. Is there a disconnect here?

 

https://www.msn.com/en-in/money/news/go-digit-insurance-ipo-virat-kohli-anushka-sharma-backed-rs-1500-issue-opening-soon-et-now-exclusive/ar-BB1m18KQ

 

Did early promoters get the shares at a lower price and that is the mark on which IPO is valued?

 

Edited 2 hours ago by Haryana