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Business News/ Markets / Go Digit share price gains 7% post moderate listing . Should you Buy, Sell or Hold the stock?

Go Digit share price gains 7% post moderate listing . Should you Buy, Sell or Hold the stock?

Stock market today: Go Digit General Insurance share price listed with slight 5% premium over the issue price on the NSE at ₹286 , in line with the analyst expectations and the GMP. The stock however gained almost 7% post listing Should you But, Sell or Hold the stock? Here's what experts say-

Go Digit share price gains 5% post moderate listing. Buy, Sell or Hold ? (Photo: Courtesy company website)Premium
Go Digit share price gains 5% post moderate listing. Buy, Sell or Hold ? (Photo: Courtesy company website)

Stock Market Today: Go Digit General Insurance share price listed with slight premium of  3.34% on the BSE at 281.10 and with 5.1% premium on the NSE at 286. The Go Digit General Insurance share price thereafter saw highs of 305.80 on the NSE indicating gains of up to 7%.

Listing in line with expectations of analysts and as indicated by GMP

The listing was broadly in line with the expectations. The issue that opened for subscription on Wednesday 15 May and closed on Friday 17 May had received a reasonable response, with issue being subscribed 9.6 times and retail portion 4.27 times.   The Grey Market premium that was at  26 on Tuesday however had slipped to 4 on Thursday indicating that the  Go Digit shares were trading just 4 higher that their issue price of 272 apiece, in the grey market. This also indicated towards marginal 1.47% listing gains for Go Digit shares at 276.  The fall in grey market premium had been attributed to volatility in the markets ahead of Lok Sabha elections 2024 results , that also to a moderate subscription compared to higher subscriptions that had been seen for earlier mainboard IPOs.

Also Read- Go Digit share price makes a lukewarm debut, stock opens with a mere 5% premium at 286 apiece on NSE

The Go Digit General Insurance issue was also looked at fairly valued. 

The valuations of the Go Digit General Insurance company at the time of IPO had been considered fairly priced by analysts Anand Rathi. At the upper price band of the IPO Go Digit General Insurance was valued at P/GWP (Gross Written Premium) of 3.44 times with a market cap of 24947. 9 crore post issue of equity shares.

Analysts cautious views post Listing -

Narendra Solanki, Head Fundamental Research - Investment Services, Anand Rathi Shares and Stock Brokers had expected the opening price for the IPO to be in the range of Rs290-310 based on the business model, financial growth and its innovate approach to make the product portfolio simpler.

Solanki said that the company has a track record of reporting losses till FY22. Thus, its limited operating history makes it difficult to evaluate future business prospects. Therefore, on listing day, investors might take an advantage of some listing gains to book some profit, said Solanki. From a longer term perspective, investors should monitor the financial performance on sequential basis and wait for some correction to take a position in the stock, added Solanki

Also Read- Awfis Space Solutions IPO fully subscribed on day 1, retail investors bid highest; check latest GMP, subscription status

Shivani Nyati, Head of Wealth, Swastika Investmart Ltd  said that the Go Digit, the fast-growing general insurance company, witnessed a moderate debut on the stock exchanges which falls short of pre-listing expectations and the grey market premium (GMP) which suggested a potential gain of around 10%.

Go Digit's moderate listing necessitates a balanced approach from investors as per Nyati. While the company possesses strong long-term potential, careful consideration of the valuation and competitive landscape is crucial. Investors may hold their position by keeping a stoploss at the issue price.

Go Digit Business model with an edge

The positives looked by the analysts includes Go Digit General Insurance approach to use  transparency and innovation to streamline the insurance application process through the combination of insurance and technological solutions  Go Digit General Insurance helps with enrollment, processing insurance claims, underwriting, policy administration, data insights, and fraud detection. Go Digit General Insurance  provides a full-stack insurance companies, fulfill most of the customer needs of motor insurance, health insurance, travel insurance, property insurance, marine insurance, liability insurance, and other insurance products. 

Also Read- Quest Laboratories listing: Quest Lab share price lists at 60% premium on NSE

As per Nyati,  Go Digit's position as the fastest-growing private non-life insurer by GWP in India positions it for continued success in the dynamic insurance market. The company's advanced technology platform and focus on innovation bode well for its future.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions







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Ujjval Jauhari
Ujjval Jauhari is a deputy editor at Mint, with over a decade of experience in newspapers and digital news platforms. He is skilled in storytelling, reporting, analysing and writing about stocks, investment ideas, markets, corporates and more. He is based in New Delhi.
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Published: 23 May 2024, 10:56 AM IST
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