Go Digit General Insurance faces regulatory scrutiny amid IPO preparations By Investing.com

As Go Digit General Insurance prepares for its initial public offering (IPO), the company has come under the regulatory lens. The Insurance Regulatory and Development Authority of India (IRDAI) issued a show cause notice to the insurtech firm on November 6, alleging non-disclosure of critical information. The notice claims that Go Digit’s holding company, GDISPL, failed to inform FAL Corporation—a subsidiary of Fairfax Financial Holdings (OTC:), Canada—about changes in the conversion ratio of Compulsorily Convertible Preference Shares (CCPS). This oversight could potentially violate provisions of the Insurance Act.

The alleged infringement has put Go Digit in a precarious position as it advances towards listing on the stock market. The regulator has outlined stern penalties for non-compliance, which could include daily fines of up to ₹1 lakh or a one-time penalty reaching ₹1 crore, whichever is lower.

Go Digit has submitted a response to the IRDAI’s allegations. The outcome of this dispute remains uncertain with a final decision from the regulatory body still pending.

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