Go Digit General Insurance shares jump 10% on robust earnings

Shares of Go Digit General Insurance, which made its debut on stock exchanges last month, rallied 10% in opening trade today, a day after the insurer released its earnings report. The company, which counts cricketer Virat Kohli and his actress wife Anushka Sharma as investors, has logged strong profit in the financial year ended March 31, 2024, driven by growth in gross written premium and asset under management (AUM).

Reacting to Q4 numbers, shares of Go Digit opened higher at ₹365, up 7.9% against the previous closing price of ₹338.35 on the BSE. Extending opening gains, the insurance stock rose as much as 10% to hit its record high level of ₹372.35, while the market capitalisation climbed to ₹32,400 crore.

Shares of Go Digit General, a firm backed by Canada-based Fairfax Group, has risen nearly 38% against its IPO price of ₹270 per share. The stock made a muted debut at ₹286 per share on NSE, a 5.1% premium of than the issue price on May 23, 2024.

The Bengaluru-based insurance tech company closed the financial year 2024 with a net profit of ₹182 crore as against ₹36 crore in FY23, a significant growth of 405%. The gross written premium for the full financial year jumped 24.5% to ₹9,016 crore versus ₹7,243 crore in FY23.

For the fourth quarter ended March 31, 2024, net profit surged 104% to ₹53 crore from ₹26 crore in the year-ago period. The gross written premium for the quarter stood at ₹2,336 crore up from ₹1,955 crore reported in Q4FY23, registering a year-on-year growth of 19%.

As per the company, the premium retention ratio for FY24 improved to 85.8% from 81.6% in FY23. For Q4 FY24, it stood at 89.9% as compared to 88.3% in Q4FY23.

As on March 31, 2024, AUM stood at ₹15,764 crore, up 24.4% from ₹12,668 cr as on March 31, 2023.

The general insurance company raised ₹2,614 crore via IPO, which was subscribed 9.6% times at a price band of ₹258-272 per share. The IPO comprised a fresh issue of ₹1,125.00 crore and an offer for the sale of ₹5.48 crore shares by its promoters and existing shareholders.

The company intends to use capital raised from fresh issuance of equity shares to undertake its existing business activities. The insurer believes that the listing of the shares on the stock exchanges will enhance the visibility and its brand image among its existing and potential customers.

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 was one of the fastest-growing insurers among private non-life insurers by gross written premium (GWP) in fiscal 2022, as per the company-commissioned RedSeer report mentioned in the DRHP.

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