After addressing the market regulator’s concerns about the company’s employee stock plans, which had been holding up the offering for months, India’s Go Digit Insurance has re-filed draught papers for a $440 million IPO.
The draught prospectus, which has not altered from its previous filing and was dated March 30, states that the IPO will consist of a new issue of shares valued at 12.5 billion rupees ($152.1 million) and an offer to sell 109.4 million shares.
The general insurance company Digit, which has the Fairfax Group and TVS Capital Funds as investors, as well as billionaire Canadian Prem Watsa, first filed for an IPO in August of last year.
However, its listing plans were stalled by the Securities and Exchange Board of India (SEBI) in September because of compliance problems related to share issuances. SEBI restarted a review later that month.
The IPO faced another setback in January this year after SEBI raised certain compliance issues related to employee stock plans in a private letter.
Digit told Reuters in January it was evaluating amendments to its employee stock appreciation rights scheme after receiving SEBI’s letter.
Such rights provided by the company enabled an employee to receive a bonus equivalent to the rise in the company’s stock price over a certain period, which Indian regulations prohibit for companies going public.
Due to this, Digit was found “not to be eligible for making an initial public offer”, according to SEBI’s letter.
The IPO would be on hold until the company changed its employee stock rights to stock option plans and refiled papers with the regulator, Reuters reported.
Go Digit’s latest filing shows it has changed its employee stock rights to stock option plans after approving the plan through a special resolution on March 27.
The company, last valued at $3.5 billion by Sequoia Capital, provides general insurance services.
The company plans to use the IPO proceeds to maintain its solvency ratio.