Go Digit Board Clears Holding Company Merger to Simplify Structure

The board of Go Digit General Insurance has approved the merger of its unlisted holding company, Go Digit Infoworks Services, into the listed insurance entity—marking the first such transaction following recent changes to India’s insurance laws that permit mergers between insurance firms and non-insurance holding companies.

The move is aimed at simplifying the corporate structure and creating a direct alignment between the insurer and its promoters. Speaking on a conference call, Chairman Kamesh Goyal said the merger would not alter management, governance, or day-to-day operations. Promoter shareholding will increase marginally by 0.03% to about 72.2%, driven by the issuance of shares worth roughly ₹43 crore at ₹375.1 per share—a premium to the prevailing market price at the time of announcement.

Strategically, the merger removes the holding company layer, directly linking shareholders with the core insurance business. This is expected to reduce compliance complexity and administrative costs, aligning with the regulator’s push for leaner ownership structures in the insurance sector.

The scheme, approved under Sections 230–232 of the Companies Act, will require clearances from shareholders, creditors, and regulators including Insurance Regulatory and Development Authority of India, Securities and Exchange Board of India, stock exchanges, and the NCLT. No cash consideration is involved; shareholders of the holding company will receive equity shares in the insurer based on a fixed exchange ratio.

From a financial standpoint, Go Digit appears comfortable. Goyal noted the insurer’s solvency ratio stood at about 226% as of September 30, well above regulatory requirements, eliminating any immediate need for capital raising. Even the additional equity issuance represents only about 1% of net worth, underscoring that the merger is driven by structure and governance efficiency rather than capital necessity.