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HDFC Bank and Axis Bank to acquire 9.94 percent stake each in Go Digit's life insurance business

HDFC Bank and Axis Bank to Invest in Go Digit's Life Insurance Business: A Game-Changer for the Indian Insurance Market!

24 April 2023

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Kunal Tyagi

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  • Each HDFC Bank and Axis Bank will invest $9.94% in the life insurance division of Go Digit.

  • The life insurance division of Go Digit hopes to raise $440 million through an IPO.

  • The investment will be paid in two installments, with the first one being finished between three and six months after the firm receives its license.

HDFC Bank and Axis Bank, two of India's top private banks, have agreed to purchase a 9.94% share each in Go Digit's life insurance division. The new business was established in December 2021, and in May 2022 it became a public limited corporation. The Insurance Regulatory and Development Authority of India has not yet issued a certificate of registration to Go Digit-Life for it to undertake the life insurance business. By an IPO, which would involve a fresh issuance of INR 1,250 crore and an offer to sell 109.45 million shares, the business hopes to raise $440 million.


Each Axis Bank and HDFC Bank has inked a legally binding agreement to invest up to INR 69.90 crore in Go Digit-Life over the course of two installments. The banks have the opportunity to spend the remaining INR 58.97 crore after making an initial subscription of INR 10.93 crore in the first tranche to purchase a stake in the firm. The banks and their affiliates are permitted to do arm's-length commerce with Go Digit-Life. Within three to six months of the firm getting its life insurance license, the first tranche of investment is anticipated to be finished.


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In two installments, the formal agreements for HDFC Bank's investment in Go Digit-Life total 69.90 crore Indian Rupees (INR). The bank may invest the remaining funds, up to a maximum of INR 58.97 crore, in the second tranche after making the first payment in the sum of INR 10.93 crore. Under the terms and circumstances outlined in the definitive agreements, Axis Bank has entered definitive agreements to invest up to INR 69.90 crore in Go Digit-Life in two tranches.


Through Go Digit-Life, Go Digit General Insurance plans to enter the life insurance industry. Under the moniker Go Digit General Insurance, the business, which was most recently valued at $3.5 million, now provides goods in the vehicle, travel, property, and health insurance divisions. The agreement with HDFC Bank and Axis Bank may increase the lenders' outreach to insurance consumers with their own banking services and provide a deeper grasp of the online insurance market.


Finally, HDFC Bank and Axis Bank have both agreed to purchase a 9.94% interest in the life insurance division of Go Digit, which is preparing to go public. The investment is contingent upon Go Digit-Life acquiring a certificate of registration from India's Insurance Regulatory and Development Authority to undertake a life insurance business. The investment will be paid in two installments, with the first one being finished between three and six months after the firm receives its license. Go Digit plans to earn $440 million through an initial public offering (IPO), which will also feature a fresh INR 1,250 crore issuance and an offer to sell 109.45 million shares.

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