SEBI puts Go Digit's IPO in abeyance. But what does that mean?

Akshata Kamath
Akshata KamathSep 20, 2022 | 14:09

SEBI puts Go Digit's IPO in abeyance. But what does that mean?

SEBI has put the Go Digit IPO on hold. (Photo: Getty Images)

Go Digit filed its Draft Red Herring Prospectus with SEBI in August 2022 to raise about Rs 1,250 crore by issuing fresh shares. But India's capital market regulator SEBI has put the IPO application in “abeyance” (ie kept on hold), thereby pausing the online insurance company's plans of going public.  

What is SEBI's IPO process like? Once companies file their Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI), the regulator shares a weekly update on the status of the IPO. The SEBI looks up the documents and seeks clarifications wherever necessary before the final approval and listing. As per the latest update, the status of Go Digit IPO seems to be in abeyance due to SEBI's observance of certain issues. SEBI will process the DRHP further only after it receives Go Digit's reply on the matter. 

Why SEBI puts some IPOs in abeyance:

SEBI normally never issues reasons about why they have paused a particular company's IPO process, but as per the SEBI rules and guidelines, SEBI usually puts an IPO in abeyance if: 

  • There is probable cause for investigation, examination or inquiry against the entities.
  • When the regulator is unable to conclude an investigation or inquiry due to “ reasons beyond its control or due to the conduct of the parties other than the entities”.
  • When the board is unable to conclude the investigation due to the conduct of the entities. 

Are there any other companies that are in abeyance? What's the status update of the other IPOs in the pipeline?

As per the dictionary, Abeyance means a state of suspension or temporary inactivity. (Photo: Getty Images)

SEBI's status updates are basically intended to make the IPO process transparent to some extent for prospective shareholders. For eg:

  • In the case of the IPO of Balaji Solutions, SEBI has sought clarifications from the company and is awaiting a reply.
  • In the case of Concord Biotech and Sula Wineyards, SEBI has received clarifications from both companies regarding their respective issues and the IPO is ''under process''. Thus Sula Wineyards and Concord might be listed before Balaji Solutions. 

Has SEBI put other IPO's in abeyance before? Yes. SEBI has previously held the below companies' IPOs in abeyance for undisclosed reasons. But once the matters of concern are resolved, the IPO process usually returns on track.    

  • May 2018 - HDFC AMC's 
  • June 2021 - Go Airlines 
  • August 2021 - Adani Wilmar 
  • August 2022 - Biba

    Btw, what does Go Digit do? 

    Go Digit sells auto, health, and travel insurance and is part of a group of firms that is attempting to expand the number of individuals in India that buy insurance coverage. Go Digit has simplified the process of buying insurance, allowing users the ability to self-inspect, claim submissions and process service requests from their smartphones. The company is backed by Sequoia Capital India, TVS Capital, A91 Partners, actress Anushka Sharma and cricketer Virat Kohli.

    Last updated: September 20, 2022 | 14:10
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