IRDAI has levied a penalty of Rs 1 crore on Go Digit General Insurance, slated for an IPO, for failing to disclose a change in the conversion ratio of compulsorily convertible preference shares (CCPS) issued to Fairfax-owned FAL Corporation by its parent company. The regulator’s order, dated May 2, 2024, highlighted that the company issued 78,00,000 CCPS instead of the agreed upon 63,00,000, altering the conversion ratio from “1 CCPS for 2.324 equity shares” to “2.324 CCPS for 1 equity share”.
Although Go Digit amended the JV agreement and disclosed the change in its Draft Red Herring Prospectus (DRHP), it failed to provide complete details to IRDAI, violating Section 26 of the Insurance Act. The company admitted the oversight in its response to the regulator, attributing it to inadvertence.
The delay in filing the JV Amendment particulars and the materiality of the changes prompted IRDAI to impose the penalty. FAL Corporation, owned by Canada-based Fairfax Financial Holdings, holds 45.3% of Go Digit’s parent company, with the remaining shares owned by founder Kamesh Goyal and Oben Ventures LLP.
Go Digit, originally planning its IPO in 2022, aims to launch it soon, seeking to raise Rs 1,500 crore. This includes a fresh share sale of Rs 1,250 crore and an offer-for-sale (OFS) of up to 10.94 crore equity shares, with Ace Indian cricketer Virat Kohli and actress Anushka Sharma listed among the shareholders.
