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Analyzing the Performance of Digit Share Price on Debut Day
The much-anticipated debut of Go Digit share price on the bourses has been less than spectacular. Opening at ₹286 on the NSE, just 5.15% higher than its issue price of ₹272, and at ₹281.10 on the BSE, the stock’s performance has been lukewarm. Despite strong subscription numbers, the opening day performance has not met the high expectations of many investors. This article delves into the details of Go Digit’s IPO journey, market reception, and future prospects.
Go Digit IPO Subscription Details
Subscription Rates
The Go Digit IPO received a significant subscription rate of 9.60 times its offered shares by the close of the subscription period. Qualified institutional buyers (QIBs) showed strong interest with 12.56 times subscription, non-institutional investors subscribed 7.24 times, and retail individual investors (RIIs) subscribed 4.27 times.
Allocation Breakdown
- Qualified Institutional Buyers (QIBs): 75% of the issue size
- Non-Institutional Investors: 15% of the issue size
- Retail Individual Investors (RIIs): 10% of the issue size
IPO Timeline and Key Dates
The Go Digit General Insurance IPO opened for subscription on May 15 and closed on May 17. Here is a quick overview of the subscription progress:
- Day 1: 36% subscription
- Day 2: 79% subscription
- Final Day: 9.60 times subscription
Company Overview
Promoters and Key Investors
Go Digit General Insurance Limited is recognized as a leading digital full-stack non-life insurance provider. Prominent promoters of the firm include Kamesh Goyal, Go Digit Infoworks Services Private Limited, Oben Ventures LLP, and FAL Corporation. Notably, cricket star Virat Kohli and actress Anushka Sharma are investors, having invested ₹2 crore and ₹50 lakh, respectively.
Financial Performance
Between March 31, 2022, and March 31, 2023, Go Digit witnessed a significant growth in revenue and profit after tax (PAT), registering an impressive 113.35% growth in revenue and 112.01% growth in PAT.
IPO Details
Offer Structure
The Go Digit IPO included an offer-for-sale (OFS) of 54,766,392 equity shares and a fresh issue of ₹1,125 crore. The OFS included shares sold by various promoters and selling shareholders, including Go Digit Infoworks Services Private Ltd, Nikunj Hirendra Shah, Sohag Hirendra Shah, Nikita Mihir Vakharia, Mihir Atul Vakharia, Shanti Subramaniam, and Subramaniam Vasudevan.
Use of Proceeds
The net proceeds from the IPO are intended to support the company’s regular business operations and fund specific projects. Additionally, the equity share listing is expected to enhance Go Digit’s brand awareness and reputation among current and prospective customers.
Market Performance and Expectations
Grey Market Premium (GMP)
On the day of listing, Go Digit’s IPO GMP was +8, indicating that shares were trading at a premium of ₹8 in the grey market. This suggested a listing price of approximately ₹280 per share, just 2.94% higher than the IPO price of ₹272.
Lead Managers and Registrars
The book running lead managers for the Go Digit IPO were ICICI Securities Limited, Axis Capital Limited, Edelweiss Financial Services Ltd, HDFC Bank Limited, and IIFL Securities Ltd. The issue registrar was Link Intime India Private Ltd.
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Conclusion
The debut of Go Digit share price on the stock exchanges has been modest, with a slight premium over the issue price. Despite strong subscription numbers and robust financial performance, the market response has been tepid. As the company moves forward, it will be interesting to see how Go Digit leverages its IPO proceeds and listing benefits to enhance its market position and drive growth.
