HDFC Bank to buy nearly 10% stake in Go Digit Life Insurance

HDFC Bank

HDFC Bank on August 25 announced it will invest Rs 49.9 crore to Rs 69.9 crore in Go Digit Life Insurance in two tranches to acquire up to a 9.94 percent equity stake in the company.

The private lender stated that it has entered into "an indicative and non-binding term sheet with Go Digit Life Insurance." The insurance company proposes to carry out life insurance business in India, subject to the grant of a certificate of registration by the Insurance Regulatory and Development Authority of India (IRDAI), HDFC Bank said in a statement.

Shares of HDFC Bank on Thursday closed 0.51 percent lower at Rs 1,463.85 apiece on BSE against its previous close.

Meanwhile, Go Digit General Insurance Ltd, backed by Fairfax Group, has filed draft papers with markets regulator SEBI to float an initial public offering (IPO).

According to the draft red herring prospectus (DRHP), the IPO will comprise fresh issuance of equity shares worth Rs 1,250 crore and an offer-for-sale (OFS) of 10,94,45,561 equity shares by a promoter and existing shareholders. Under the OFS, Go Digit Infoworks Services Pvt Ltd will sell 10,94,34,783 equity shares. Also, the company may consider a pre-IPO placement of equity shares aggregating up to Rs 250 crore. If such placement is completed, the fresh issue size will be reduced.

Go Digit offers motor insurance, health insurance, travel insurance, property insurance, marine insurance, liability insurance, and other insurance products, to meet the needs of the customers. It is one of the first non-life insurers in India to be fully operated on the cloud and has developed application programming interface (API) integrations with several channel partners.