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Go Digit’s Funding from Axis and HDFC Bank to Drive Digital Insurance

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Go digit Funding

Introduction

Go Digit General Insurance, a promising player in the online insurance industry, has recently caught the attention of investors in its venture Go Digit Life. With a valuation of $400 million, the company went public on May 10, 2022, and has garnered investments from two leading banks, Axis Bank and HDFC Bank. The banks have announced their intentions to invest INR 10.93 crores each, acquiring a 9.94% stake in the company.

Godigit.com’s top 5 competitors are: acko, tataaig, insurancedekho, bajajallianz

Go Digit Funding: Axis Bank and HDFC Bank’s Investment in Go Digit

The investment in Go Digit Life by Axis Bank and HDFC Bank is expected to benefit both the insurance industry and the banks themselves. The Go Digit deal may give Axis Bank a better understanding of the online insurance industry and allow it to improve outreach to insurance customers with its own banking offerings. Similarly, HDFC Bank’s investment in Go Digit Life may allow it to expand its presence in the digital insurance market, which is expected to grow significantly in the coming years.

Growth of the Digital Insurance Market in India

The digital insurance market in India has seen a surge in recent years, with the COVID-19 pandemic serving as a catalyst for increased adoption of digital channels. According to a report by Boston Consulting Group, the Indian insurance market is expected to reach $280 billion by 2025, with digital channels expected to account for a significant portion of this growth. With this investment in Go Digit Life, Axis Bank and HDFC Bank are well-positioned to capture a share of this growth.

Axis Bank’s Definitive Agreements for Investment

Axis Bank, in particular, executed definitive agreements on April 21, 2023, to invest up to INR 69.90 crores in Go Digit Life in two tranches, subject to the terms and conditions set out in the definitive agreements. The bank will pay INR 10.93 crores as a part of the first tranche, while it may elect to invest INR 58.97 crores in the second tranche post-completion of the Initial Subscription, in accordance with the definitive agreements. Following the first tranche, the bank will hold 9.94% of the equity share capital of Go Digit by acquiring fully paid-up equity shares of a face value of INR 10 each.

Timeline for Investment Completion

The investment is expected to be completed within three to six months from the execution date, according to HDFC Bank. This investment in Go Digit Life is a significant development for the online insurance industry in India. The investment is expected to enable the banks to enhance their offerings and expand their presence in the digital insurance market, contributing to the overall growth and development of the Indian economy.

Conclusion: A Strategic Move for a Digital Future

In conclusion, the investment by Axis Bank and HDFC Bank in Go Digit Life is a strategic move, positioning the banks to capture a share of the rapidly growing digital insurance market in India. The investment is expected to benefit both the banks and the insurance industry, contributing to the overall growth and development of the Indian economy. As such, this investment is a positive development and a step towards a more digital future for the insurance industry in India.

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